I am entering the last three monthes of my current financial year as a test period before going live on 1st April.
So far I have only entered suppliers’ invoices [without the associated payments] and the Dashboard shows that I owe £21,168 [which includes £1582 Capital Expenditure.] I have entered NO Sales Invoices so the Dashboard is correct showing nil due.
The P&L Report shows that I have made a profit of £8602 [even though the cost of sales and expenses are all correctly displayed] - and clearly there should be a Loss, as no income is shown. I am very confused.
VAT Query … Should suppliers who have not registered for VAT be categorized as " Exempt/Out of Scope" or “No Special traetment” with a Default of 0% ?
Are you ltd co or sole trader? If ltd company then all you need is opening balance as journal, no need to enter all previous years P7L and balance sheets.
If you are vat registered with standard scheme , your non vat registered suppliers would be entered gross with Zero vat unless their services/products are actually exempt
Thanks for quick response
I am a VAT registered sole trader. I have not entered any opening balances other than bank accounts - because I want to start the new year [from Apr 1st] with a “clean” system. I am only entering transactions that take place from Jan 1st onwards [as though it were a now organisation on that date but with cash in the bank]. As I have only entered these “new” purchases with no sales, surely the balance in P&L should equal puchase invoice total ? Or am I completely missing the point ?
I unerstand that the invoices are entered with zero VAT. There are options on the the New Supplier entry page. One is Out of Scope/ Exempt - the other is treat as normal [ a third being Other European and not relevant]. I don’t lknow which option to tick for non-VAT registered suppliers.
A common issue when setting up an account is the suspense account (9998). This is a holding nominal code that is used to opening balances and other similar transactions that the system doesn’t know what to do with. For example, you may have an opening balance of £5,000.00, but where did that money from?
As it sits on the suspense account it’s classed as an expense and will affect your profit and loss. What you need to do is journal this away from that nominal to the relevant nominal.
You mention that you’re starting for the new financial year; what did you use prior to QuickFile? For example, spreadsheets, other accounting software, etc.
In relation to your VAT query, generally if your supplier is not VAT registered and based in the UK, they would be treated as normal with zero rate. We always advise to check things like VAT with your accountant (I’m not one, but @FaradayKeynes is, amongst others on our forums) as it’s quite a complex area of tax.
I hope this helps!
Can I assume that, if I journal the total amount that constitutes my bank balances from The "Proprietor’s Drawing account, it will balance the books ?