Cash Accounting
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Contents
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
If you need to post opening balances onto Customer or Supplier accounts they would need to be posted as individual transactions. This allows the system to work out the VAT on any payments made against each document.
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
PL03 SL03
