Sanity check on migrating to QuickFile, please!

Support
1

Hi folks,

I’m after a ‘sanity check’ on my migration plan from Xero to QuickFile. I’d be very grateful if someone could check over what I’m doing. I’m currently educating myself on the basics of business accounting, which I’m actually quite enjoying (and our needs are very simple) - but I’m very much aware that I could mess things up if I fail to understand something important along the way …

We’re a small media & comms agency. We are moving from Xero to QF, and from barclays to Starling, pretty much simultaneously - and I want the move to be as smooth as possible for us.

I’ve tried to time this move to coincide with our year end (31/03), so we can start using QuickFile and Starling from 01/04, but there’s a slight snag with the bank - the Current Account Switch Service was supposed to complete on 01/04, but they did it early (28/03). Because the account is now closed (early, without warning), I have no access to online banking to export a CSV. Barclays are sending everything printed, by post … hopefully this won’t be a big issue - there should be no invoices generated by us in this period and only a handful of bills going out.

I’ve signed up for a QuickFile account, and these are the salient details I’m putting into QF settings:

  • Year end: 31/03 (accounting reference date, per Companies House)
  • VAT period: Mar, Jun, Sep, Dec - I’m aware this just has to be what HMRC say it is. We were accrual-based before, but I’m leaving the QF default of cash-based here (seems better for us). I assume changing this isn’t a problem?
  • VAT Filing Start Date: 01/03/2022 (because we want to use QF from this period onwards). I’ve filed the previous (Dec-Feb) return via MTD with Xero, and will ensure any transactions from 01/03 are entered in QF. I assume this is appropriate?

In terms of next steps, I plan to export and import clients and suppliers from Xero - this seems fairly straightforward. Ditto MTD and bank account connections. However, I’d appreciate a pointer regarding the various methods outlined here in your KB, as to which is the most appropriate/easiest method of migration:

I assume that ‘Method 1 : Start using the system from the beginning of your financial year’ seems to make the most sense, given the timing of the move and the small number of transactions dating back to 01/03 that I’ll have to enter manually. Does this make sense, given the above?

I’m also a little unclear on the balances. Would I still have to import trial balances as of 31/03 (the day before we start using QF)? We’ll have access to Xero until our current accountant ‘closes off’ everything there to coincide with the end of this FY (at which point we’re parting company with them and will use a QF-affiliated accountant when required).

Does this all seem to make sense? Have I missed anything obvious? Thanks in advance for advice and pointers!

James

2

Hello @HealthWeb

With regards to dates and the Trial Balance.

You mention you are starting to use QuickFile from 01/04/22 but later you mention the below

  • VAT Filing Start Date: 01/03/2022 (because we want to use QF from this period onwards). I’ve filed the previous (Dec-Feb) return via MTD with Xero, and will ensure any transactions from 01/03 are entered in QF. I assume this is appropriate?

Are you planning to accounting and submitting March through Xero or QuickFile?

3

Hi @QFSteve,

Good point. I plan to submit the Mar-May VAT return with QF - I guess 01/03 is the better date to start using QF, and enter any transactions from that date?

4

Hi,

I think quickfiles default is accrual-based. There is cash-based P+L report available but I think the system always runs accrual-based. I can be wrong, it is now a few years that I am with quickfile and they have maybe changed something since. It’s maybe worth double-checking.
However, welcome to quickfile.

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The move should be straight forward. Have a look here which should be helpful for you
https://support.quickfile.co.uk/t/importing-your-trial-balance-from-xero/13629

As QFSteve mentioned, you would just sort out the date and where you want to do the VAT return for the last period.

6

Interesting - it was set to cash-based when I went to those settings. Thanks for the welcome1

@QFSteve Is there any particular benefit (in terms of QF usage) to one over the other? I prefer cash-based for cashflow purposes, but if QF calculates reports in a certain way, I might default to that.

7

Brilliant, thanks for that.

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Hello @HealthWeb

It would be entirely your choice, although you may wish to have a conversation with your accountant about it before deciding.

We do get lots of queries relating to prepayments on cash based.

This is because the VAT return looks for “Paid invoices” to work out VAT.
If a customer gives you money and it is not allocated to an invoice there is no VAT element for it to work out. (something to watch our for).

Pro’s and Cons outlined here - VAT Cash Accounting vs Accrual Accounting

Please see - VAT accounting methods in
VAT Returns Guide

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Thanks @QFSteve - I think we’ll stick with cash-based. It’s simpler and we’re only a small outfit.

So, in summary, these would seem to be the remaining steps:

  • Use a ‘start date’ for QF of 01/03 (current VAT period start date)
  • Enter any sales and purchases from 01/03 manually, so QF can submit the Mar-May VAT return via MTD (already connected)
  • Export trial balances from Xero as of 31/02, and import into QF

Does that make sense? How would I deal with the fact that I’d have sales and purchases in QF that won’t be in the bank feed (because they happened in the old Barclays account)?

10

Hello @HealthWeb

You mentioned earlier

Barclays are sending everything printed, by post … hopefully this won’t be a big issue - there should be no invoices generated by us in this period and only a handful of bills going out.

I assume you will have to enter them into Xero. You could just export them from Xero and import them onto QuickFile as a bank statement.

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Oh fantastic - didn’t realise I could do that. That saves me entering 25 of them manually, it seeems - thanks! :slight_smile:

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@QFSteve Is this sane, then?

  • Use a ‘start date’ for QF of 01/03 (current VAT period start date)
  • Import any sales and purchases from 01/03 as a bank statement (exported from Xero), so QF can submit the Mar-May VAT return via MTD (already connected)
  • Export trial balances from Xero as of 28/02, and import into QF
13

Hello @HealthWeb

That would work, but I stress I am not an accountant nor bookkeeper and it may be worth running it past yours first.

I assume you will have to enter them into Xero. You could just export them from Xero and import them onto QuickFile as a bank statement.

There may be some tweaking to the CSV output from Xero to import into QuickFile as I am unsure of their export format

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Understood, thanks again @QFSteve

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QuickFile accounting data is all accrual based but VAT defaults to cash accounting when you first enable it.

It “isn’t a problem” in the sense that you don’t need permission from HMRC to make the switch, but you need to be very careful when you do switch that you’ve accounted for everything once and nothing twice.

1 Like
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Noted, thanks @ian_roberts - and thanks for the clarification on the methodology at the backend.

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Update: I’ve imported trial balances as of 28/02/2022, which was pretty straightforward.

However: The ‘crossover’ month (March) contains 25 transactions from the old Barclays current account transactions export from Xero. None of these transactions are VAT-able (no sales - they’re all purchases, and either exempt or billed in $USD from our hosting providers).

I’d be grateful if someone could clarify:

  1. Do I actually need to import these transactions, given that none of them have an impact on the current VAT quarter?
  2. If I do have to import them, how do I deal with the fact that these are in a bank account that no longer exists (QF is connected to our new account, which has no transactions other than the balance transfer)?

Thanks very much in advance!

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If any of these are transactions that you have to reverse charge for VAT, then you would need to input them as purchases in QuickFile (they don’t affect the bottom line box 5 but they do need to be listed in boxes 1 and 4). What I’d do is

  • create a purchase dated on the date of the invoice from the hosting provider, with reverse charge applied (in the additional VAT options at the bottom of the purchase editor)
  • mark this purchase as paid from the director’s loan bank account on the date you actually paid it

If these are already accounted for in the trial balance then you’d need to adjust the trial balance journal to counteract this change, i.e. debit DL and credit the relevant expense nominal, but if they’re after the trial balance date then they can stay as they are. Presumably your TB includes whatever the balance was on the Barclays account at 28/02, where did you map this in QuickFile?

1 Like
19

Hello @HealthWeb

What you could try is preview a vat return for March in Xero (if that is possible) and these transaction do not show or affect any of the boxes then you may not need to enter them.

I they do follow @ian_roberts advice or query with your accountant as you may be able to do adjustments for them.

20

Superb, thanks @ian_roberts and @QFSteve - I’ll have a look at this tomorrow!