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• # 91114
• Wed 22 May 2013 01:26 PM

Hi all

I appear to be getting in a muddle!

I have recently started a new client on Sage One who previously had no record keeping for his accounts whatsover. He is VAT registered and uses the Cash Accounting scheme. 

My problem is that I have a VAT figure for the one month prior to going onto SageOne to be entered as an opening balance ie

Income VAT                    £4,278.91
Purchase VAT                  £1,735.15
Therefore,
Current VAT Liability=      £2,543.76

Sage One allows you to enter opening balances for bank, sales & purchases but the opening balance for the VAT has to be entered via journal. Now opening balances are a definate weak point for me and I cannot determine what the double entry would be for me to enter the above.

I truly hope that someone could very kindly point me in the right direction to put me out of my misery.

Many thanks for any assistance that you can provide.
Kind regards

Sarah    
  
   

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• # 91159
• Thu 23 May 2013 06:17 PM

Hi Sarah

I would do a journal as follows:
CR Vat input £1735.15
DR Vat output £4278.91 
CR Vat due £2543.76

Then when your client pays the VAT due the journal will be

CR £2543.76  bank
DR £2543.76 Vat due.

Hope this helps (and I hope it's right too!!)

Kind regards

Debbie 

• Debbie
  www.beckcottage.com
  
  

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• # 91160
• Thu 23 May 2013 07:34 PM

That's not quite right, the VAT input and output accounts are asset and liability accounts which would be left with balances on them if you did that journal.

You need to prepare a trial balance as at the date immediately prior to switching to sage, that trial balance will include the VAT accounts. Then enter it all on sage as one journal.

• Ruth
  www.shoreaccounting.co.uk

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• # 91161
• Thu 23 May 2013 07:36 PM

Also, regarding customers and suppliers, I don't use sage so don't know which account the double entry for the opening balances for them goes to, but it should be a suspense account so you credit opening creditors and debit opening debtors to that suspense account when entering the trial balance.

• Ruth
  www.shoreaccounting.co.uk

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• # 91164
• Thu 23 May 2013 08:11 PM

Thanks for your correction Ruth, I wasn't looking at the bigger picture!

Kind regards

Debbie  

• Debbie
  www.beckcottage.com
  
  

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• # 91165
• Thu 23 May 2013 08:28 PM

Hi there,

As Debbie said you really need to enter opening balances as a journal from the previous year's accounts.  Does your client have any to enter? (i.e. Balance sheet figures).

You cannot enter your input and output VAT in the journal suggested as (as Ruth said) it will leave balances on these accounts.  The input VAT and output VAT accounts are cleared down to the VAT Liability account which in turn is cleared down by a bank payment (or receipt).

Pauline

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• # 91166
• Thu 23 May 2013 08:31 PM

Thank you Debbie & Ruth

As last years accounts have not been completed I do not have a trial balance to enter therefore I shall use the suspense account as the double entry. I just was not sure if this was the correct journal though as I really struggle to understand the opening balance concept into my head.

I am pretty inexperienced and still on a steep learning curve and this clients accounts did not exist, He did not know which customers had paid him or not and I did become somewaht overwhelmed at one point from it all but I am now slowly pulling it all together and implementing a good system for everything to flow smoothly going forward.

Many thanks to you both for your guidance - it is good to know that I am not totally on my own.

Kind regards

Sarah       

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• # 91170
• Fri 24 May 2013 06:29 AM

Thanks Pauline,
We must have both been typing our last comment at the same time.
Unfortunately, there is no balance sheet or trial balance from last years accounts, well not yet anyway and unlikely to be ready before the next VAT return is due. My idea was to enter the current tax year onto sage one as I go rather than allow them to build up whilst last years are being finalised. Therefore, I will now have 2 months of the VAT quarter entered onto sage but the first month calculated manually to be entered but will need to be included.

I am now thinking that I should have started the sage entry at the start of a new VAT quarter rather than part way but damage is now done!

Would you agree that I should now action a journal for the VAT Liablilty account/Suspense only rather than VAT Input and Output? I am also trying to think ahead for when I run the VAT Return on sage and how that will pull the information through. This will be my first time running VAT on sage so unsure if I can manually change the amounts as I would not think that it would be able to provide the VAT Due and VAT Reclaimed figures correctly.     

I now believe that I have made a bit of a hash with this but on a positive note I will learn from this experience.

Many thanks for your help.
Sarah     

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• # 91182
• Fri 24 May 2013 01:40 PM

Hi Sarah,

Yes you will have to journal the VAT Liability to the suspense account then.  To be  honest, in a situation like this you will have to make the best job of it that you can.   If there is going to be a TB to enter eventually it can all be amended later.  (Does he actually have an accountant?)

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• # 107357
• Sun 19 Apr 2015 09:01 AM

RuthAns said:

“That's not quite right, the VAT input and output accounts are asset and liability accounts which would be left with balances on them if you did that journal.

You need to prepare a trial balance as at the date immediately prior to switching to sage, that trial balance will include the VAT accounts. Then enter it all on sage as one journal.”

 Hello,

Does anyone know if it is possible to see the original opening balances entered into Sage One please.

Katie

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