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Most QuickBooks users, will have, by now, been forced to go through the upgrade process from either 2006 or 2008 to QuickBooks 2010. The new version is actually greatly enhanced, particularly with regard to VAT accounting, but the upgrade itself is fraught with difficulty and the Intuit technical support service seem to be providing some very dangerous advice when it comes to "resolving" the VAT issues during upgrade, which is why it is important for Accountants to take careful note of this article.
After upgrading, the new VAT regime may report what is termed "unassigned amounts", and careful consideration needs to be given to how these amounts are treated, as they affect the VAT Control account. A first call to the Intuit support centre, the advisor may tell you to post the unassigned amount to the "Opening Balance Equity" account, in the bottom half of the balance sheet - but this is very dangerous as it could mean that the actual VAT liability for the next VAT period could be over or under stated. (Not to mention that posting amounts to capital accounts in such a fashion is hardly correct anyway.)
Bookkeepers should consider "unassigned amounts" in the context of what looks right in terms of the current VAT return: i.e. if the VAT liability is £10,000 less than it usually is, chances are there's a problem and that the unassigned amount needs to be posted back to the VAT account in some way. If the VAT is reported on a standard accrual basis (rather than cash), then you can easily sense check by running the VAT report and checking the amount owing agrees with the VAT Control account balance as at the end date of the VAT period. (We do all this as a matter of course at Marshes, anyway.) If they do not agree, there is definitely an issue.
The way to deal with VAT upgrade issues varies greatly depending upon a number of factors, but mainly whether VAT is accounted for on a cash or accrual basis. I recommend seeking support for VAT issues regarding the upgrade process here:
http://community.intuit.com/category/vat-uk
where I have found one or two contacts who have been very helpful.
Accountants: you should be aware of the issues outlined herein and note to check the VAT makes sense when reviewing clients QuickBooks files (or reports generated therefrom), particularly checking for any unassigned amounts that have been posted to the bottom half of the balance sheet, as they are likely to be erroneous. And please remember to let the bookkeeper, as well as the client, know direct if a VAT adjustment is required and check VAT closing balances will reconcile as a result.
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