Account for incoming VAT – Free Online Small Business Accounting Software Questions & Answers
I have a problem and I’m hoping someone can help.
Like many small businesses I am allowed to pay VAT in the period it was received as opposed to when the sale took place. This covers my 60+ days credit that I work to.
So, I started using Bullet in January 2015. I’m going to use example figures to highlight what I mean.
In the period Jan/Feb 2015 I took in €200 in VAT from Jan/Feb sales and spent €300 in VAT in purchases for the same period. So Bullet thinks I have a €100 repayment due to me from Revenue.
But, in the period Jan/Feb 2015 I received €1000 in VAT from sales that occurred in 2014, but where payments for those sales were made in 2015. These payments were deposited into my ‘main’ business account. At the end of the tax period I moved the relevant amount into my ‘tax’ account.
So, my actual return to revenue was €900, which I paid from my ‘tax’ account. The transaction has now appeared on my bank statement and Bullet is asking what this is for, as it doesn’t match the €100 refund it was expecting.
I cannot figure out how to let Bullet know about this.
I had previously setup new (chart of account) accounts to handle incoming payments and liabilities from 2014, but can’t figure out a way to handle this problem as the account reconciliation function wont allow me take something from each side of the balance sheet to make a figure that matches the payment.
Please help Bullet community!