Difference between revisions of "Cash Accounting"

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{{Incomplete}}
 
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== Summary ==
 
== Summary ==
  
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You are only able to operate a Cash Accounting system under specific circumstances. Please check with your accountant and [https://www.gov.uk/HMRC HMRC] for specific financial advice before requesting to use Platinum Software for Cash Accounting.  
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You are only able to operate a Cash Accounting system under specific circumstances. Please check with your accountant and [https://www.gov.uk/HMRC HMRC] for specific financial advice before requesting to use Platinum Software for Cash Accounting.
  
 
== More Information ==
 
== More Information ==
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{{Note|text=This would only usually be done when you are setting up your Platinum system.}}
 
{{Note|text=This would only usually be done when you are setting up your Platinum system.}}
  
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Opening balances would need to be posted onto Customer or Supplier accounts as individual transactions. This allows the system to work out the VAT due/to be reclaimed when a payment is made.
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Outstanding balances have to be posted onto Customer or Supplier accounts as individual transactions under Cash Accounting. This allows the system to work out the VAT due/to be reclaimed when a payment is made.
  
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* Opening balances are posted in {{Menu|{{PL}}/{{SL}}|Purchase/Sales Ledger Postings}}.
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* These outstanding transactions are posted in {{Menu|{{SL}}/{{PL}}|Sales/Purchase Ledger Postings}}.
 
* At {{DataPrompt|Doc. type}}, choose the type of document you want to post.
 
* At {{DataPrompt|Doc. type}}, choose the type of document you want to post.
 
** Choose {{DataValue|Invoice}} if you want to post an outstanding invoice.
 
** Choose {{DataValue|Invoice}} if you want to post an outstanding invoice.
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** Choose {{DataValue|Credit}} if you want to post an outstanding credit..
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** Choose {{DataValue|Credit}} if you want to post an outstanding credit.
 
** DO NOT select {{DataValue|Opening balance}}.
 
** DO NOT select {{DataValue|Opening balance}}.
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* At {{DataPrompt|Supplier:}}, enter the Supplier's account code or [[How do I find a supplier?|search]] for the supplier the document applies to.
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* At {{DataPrompt|Customer/Supplier}}, enter the Customer/Supplier account code, or [[Do I have to remember all these customer and supplier codes?|search]] for their account.
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* At {{DataPrompt|Document No}}, enter the invoice or credit number.  
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* At {{DataPrompt|Document No}}, enter the invoice or credit number.
  
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{{Note|text=This can only be up to 8 characters long. If the number you have is longer than this, make sure you enter the last 8 characters only.}}
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{{Note|text=This field is limited to 8 characters. If the number you have is longer than this, please enter the last 8 characters only and enter the full number in the {{DataPrompt|Reference}] field.}}
  
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* At {{DataPrompt|Date}}, enter the date shown on the document from the supplier.  
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* At {{DataPrompt|Date}}, enter the date shown on the document from the customer/supplier.
  
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{{Note|text=You masy wish to date opening invoices and credits as the first day of the first month you are using Platinum.}}
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{{Note|text=If the date falls into a previous financial year you will need to enter a suitable date within the current financial year e.g. the 1st of the new year.}}
  
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* At {{DataPrompt|Description}}, enter up to 15 characters to describe the document you are posting. This is what you will see when you view "Supplier History" so it should be used to identify the nature of the transaction, e.g. {{DataValue|VEHICLES}}, {{DataValue|PARTS}}, {{DataValue|PETROL}} or you could enter an Order Number. Alternatively you could enter {{DataValue|OP BAL}}.
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* At {{DataPrompt|Description}}, enter up to 15 characters to describe the document you are posting. This is what you will see when you view the account history so it should be used to identify the nature of the transaction, e.g. {{DataValue|UNITS}}, {{DataValue|PARTS}}, {{DataValue|PETROL}} or you could enter an Order Number. Alternatively you could enter {{DataValue|OP BAL}}.
  
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* At the {{DataPrompt|Amounts}} section of the screen:
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* At the {{DataPrompt|Amounts}} section of the screen
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** Enter the Nett amount(s) against the appropriate VAT Rates and press {{KeyPress|Enter}}. The V.A.T. will be automatically calculated.
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** Enter the Nett amount(s) against the appropriate VAT Rates and press {{KeyPress|ENTER}}. The V.A.T. will be calculated automatically.
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* At {{DataPrompt|Centre}}, enter Purchase [[How do I Find a Cost Centre?|Centre]] {{DataValue|995}} - Opening Balances.
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* At {{DataPrompt|Centre}}, enter {{DataValue|995}} - Opening Balances.
  
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{{Note|text=If this centre does not exist you will need to [[How do I Create a Sales or Purchase Centre?|create]] it and link it directly to {{DataValue|Z990}} - Suspense Account. When you post your opening Trial Balance you will post the Debtors and Creditors balances to this centre to contra the opening balances posted to Suspense - click [[How do I Enter an Opening Trial Balance?|here.]]}}
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{{Note|text=If this centre does not exist you will need to [[How do I create a sales or purchase centre?|create]] it and link it directly to {{DataValue|Z990}} - Suspense Account. When you post your opening Trial Balance you will post the Debtors and Creditors balances to this centre to contra the opening balances posted to Suspense - see [[How do I enter an opening trial balance?]]}}
  
 
* Click {{Button|Done}} and {{DataValue|Accept}} to save the posting.
 
* Click {{Button|Done}} and {{DataValue|Accept}} to save the posting.
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{{Example|text=For a sales invoice the ''Nett'' amount would ''Credit'' the appropriate Sales Centre, the ''VAT'' amount would ''Credit'' Z989 - VAT Liability Control and the Total amount would ''Debit'' Z994 - Sales Control (Debtors).}}
 
{{Example|text=For a sales invoice the ''Nett'' amount would ''Credit'' the appropriate Sales Centre, the ''VAT'' amount would ''Credit'' Z989 - VAT Liability Control and the Total amount would ''Debit'' Z994 - Sales Control (Debtors).}}
  
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When an invoice is paid the system will automatically transfer the appropriate VAT amount from ''Z989'' to ''Z999'' - VAT Outstanding.  It would then appear in the relevant section of your [[How do I Run the VAT 100 Report?|VAT100 report.]]
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When an invoice is paid the system will automatically transfer the appropriate VAT amount from ''Z989'' to ''Z999'' - VAT Outstanding.  It would then appear in the relevant section of your [[How do I run the VAT 100 report?|VAT100 report.]]
  
 
== See also ==
 
== See also ==
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* [[Posting Purchase Invoices]]
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* [[Posting purchase invoices]]
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* [[How do I Create a Sales or Purchase Centre?]]
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* [[How do I create a sales or purchase centre?]]
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* [[How do I Run the VAT 100 Report?]]
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* [[How do I run the VAT 100 report?]]
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* [[How do I Enter an Opening Trial Balance?]]
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* [[How do I post opening balances?|Opening Balances for a non Cash Accounting system]]
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* [[Recommended Accounting Routines]]
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* [[How do I enter an opening trial balance?]]
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* [[Recommended accounting routines]]
  
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{{KB_Tags|Cash Accounting, VAT, Posting, Opening balance, Z989, VAT100, Z999}}
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{{KB_Tags|cash accounting, vat, posting, opening balance, z989, vat100, z999}}
 
{{KB_PL}}{{KB_SL}}{{ZN_Accounts}}
 
{{KB_PL}}{{KB_SL}}{{ZN_Accounts}}
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{{KB_Ref|PL03 SL03}}
 
{{KB_Ref|PL03 SL03}}

Latest revision as of 13:55, 8 July 2024

Summary

You are only able to operate a Cash Accounting system under specific circumstances. Please check with your accountant and HMRC for specific financial advice before requesting to use Platinum Software for Cash Accounting.

More Information

Cash Accounting is a method of accounting whereby you account for VAT (output tax) on your sales based on the payments you receive, rather than on the VAT invoices you have produced.

VAT on purchases (input tax) is reclaimed once you pay the supplier and is calculated on the amount you pay. Under a normal accounting situation you would reclaim VAT on the Invoices you receive even if you haven't yet paid your supplier.

Posting Opening Balances

This would only usually be done when you are setting up your Platinum system.

Outstanding balances have to be posted onto Customer or Supplier accounts as individual transactions under Cash Accounting. This allows the system to work out the VAT due/to be reclaimed when a payment is made.

  • These outstanding transactions are posted in " Sales Ledger/Purchase Ledger Sales/Purchase Ledger Postings".
  • At "Doc. type", choose the type of document you want to post.
    • Choose 'Invoice' if you want to post an outstanding invoice.
    • Choose 'Credit' if you want to post an outstanding credit.
    • DO NOT select 'Opening balance'.
  • At "Customer/Supplier", enter the Customer/Supplier account code, or search for their account.
  • At "Document No", enter the invoice or credit number.

{{Note|text=This field is limited to 8 characters. If the number you have is longer than this, please enter the last 8 characters only and enter the full number in the "Reference}] field."

  • At "Date", enter the date shown on the document from the customer/supplier.
If the date falls into a previous financial year you will need to enter a suitable date within the current financial year e.g. the 1st of the new year.
  • At "Description", enter up to 15 characters to describe the document you are posting. This is what you will see when you view the account history so it should be used to identify the nature of the transaction, e.g. 'UNITS', 'PARTS', 'PETROL' or you could enter an Order Number. Alternatively you could enter 'OP BAL'.
  • At the "Amounts" section of the screen
    • Enter the Nett amount(s) against the appropriate VAT Rates and press <Enter>. The V.A.T. will be calculated automatically.
  • At "Centre", enter '995' - Opening Balances.
If this centre does not exist you will need to create it and link it directly to 'Z990' - Suspense Account. When you post your opening Trial Balance you will post the Debtors and Creditors balances to this centre to contra the opening balances posted to Suspense - see How do I enter an opening trial balance?
  • Click [Done] and 'Accept' to save the posting.

Where can I see VAT outstanding on unpaid documents?

When an invoice or credit is posted onto the Sales Ledger or Purchase Ledger the entries into the system are explained in the example below:

For a sales invoice the Nett amount would Credit the appropriate Sales Centre, the VAT amount would Credit Z989 - VAT Liability Control and the Total amount would Debit Z994 - Sales Control (Debtors).

When an invoice is paid the system will automatically transfer the appropriate VAT amount from Z989 to Z999 - VAT Outstanding. It would then appear in the relevant section of your VAT100 report.

See also


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Keywords AND Misspellings
cash accounting, vat, posting, opening balance, z989, vat100, z999
Tags

PL03 SL03

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