When filing VAT on Sage I am usually convinced that the right answers have been given to all questions as the resulting figures are correct. But very often I have doubts at the back of my mind because of confusing questions, terminology and options that I have to go through. At one point enough was enough and we decided to find what exactly every single detail means.
1. Include Reconciled or not?
When you go to Modules / VAT / Select VAT quarter date, you will come across a box ‘Include Reconciled’ next to 'Calculate' button. Make sure you do NOT tick it.
So what does 'Reconciled' mean here? Somebody would think it is an option to include bank reconciled items. It is not so. In this case 'Reconciled' means an item that has been filed (flagged) in the previous VAT returns. Therefore we do not want to include it again in the next VAT return...
2. Do we include previous VAT unreconciled items or not?
If there are any VAT unreconciled items from the previous VAT return period (i.e. transactions that were entered on the system in the previous VAT return period AFTER it was filed), a question will pop up asking to include previous VAT unreconciled items or not - press ‘Yes’.
These transactions might be those where supplier bills arrive late and you need to enter them with the date which falls into previous VAT return period. Or may be there was a double entry cheque posted which was unreconciled in the bank account at the time, you didn't realise it thinking that the cheque hasn't been cashed yet, accounted it for VAT in the previous return and then had to delete the cheque and include VAT reversal in the next VAT return.
3. Do we flag transactions for VAT?
When you press 'Reconcile' you will get a question: 'Flag transactions for VAT?' – select 'Yes'. This question basically asks if we want VAT return transactions to be VAT reconciled (flagged) so that they are not included in the next return again...
4. What do Yes or No answers mean in the upper right hand corner on our VAT return report?
Check that there are following answers on VAT return reports in the upper right hand corner:
Inc Current Reconciled:
- No (because we have not inluded VAT reconciled (flagged) items that have been filed previously)
Inc Earlier Unreconciled:
- Yes (if there were any transactions entered on the system in the previous VAT return period AFTER it was filed)
- No (if there were no transactions entered on the system in the previous VAT return period AFTER it was filed)
Have you come across any other tricky situations when working with Sage accounting software? Please feel free to share you own experience in comments below.
Have you come across any other tricky situations when working with Sage accounting software? Please feel free to share you own experience in comments below.
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