I am doing a set of accounts for a client who is VAT registered.

I have noticed a number of purchase invoices dated in the previous year that have been paid in this financial year but were not included in the creditors b/fwd figure from the accountant.

How do I deal with this as the client has claimed the VAT in this fanacial year on his VAT Return but it doesn't show on his VAT Return on Solar Account???

Thanks
Annette

Hi Annette,

Regarding the VAT: It sounds like you have not set up Solar Accounts to use the 'cash method' when calculating your VAT return. To fix this, click menu Setup > Contact Details & VAT > VAT Is Calculated When Payments Are Received.

Regarding the purchase invoices from the previous year: If you enter all the purchase invoices which were outstanding at the beginning of the financial year then you should find that the Accounts Payable opening balance figure in Solar Accounts is correct.

Regards,

It would appear from what you say that the purchase invoices were not included in last year’s accounts otherwise the accountant would have included them in creditors. (Last years profits would then have been overstated by the net total of these invoices.)
If this is the case and if you are NOT using the cash method you should simply enter the invoices dated on the first day of the current year. This should then tie in with the VAT claimed by your client. It will also reduce the profit this year to compensate for the overstatement last year.

In order to show that these were originally dated in the previous year you could highlight this by appending the original date to the suppliers Invoice No. on each invoice.
Hope this makes sense.

Thanks Mark, yes they have confirmed they are on cash accounting, problem solved. If only everything in accounts was that simple eh!!