Categorising items with different VAT in QB

How to categorise items in QB from one receipt with multiple VAT rates

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Hi, 

I'm starting to use QB for one client who runs coffee shop. He does some of his food and supplie shopping in Tesco etc... and on single shopping receipt there will be items some of which are vatable and some not.

How do you categorise these transactions in QB. Do you need to go through every single receipt and split each receipt?

 

Thanks for any advise

Replies (12)

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Scalloway Castle
By scalloway
12th Jun 2022 08:53

When I did this I just used to have a spreadsheet open and use it as a scratchpad to list and add up the VATable and non-VATable then post the totals.

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By Leywood
12th Jun 2022 09:02

[quote=aus] ‘Do you need to go through every single receipt and split each receipt?’

What Scalloway says.

Alternatively you could just ditch those type of clients.

Or employ a bookkeeper.

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Replying to Leywood:
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By Hugo Fair
12th Jun 2022 12:13

Or convince client of the 'error' of his ways in doing "some of his food and supplies shopping in Tesco etc".
For basic raw materials, proper wholesalers (or a specialist bean supplier if necessary) will always trump the supermarkets ... whereas if fully processed foods (like cakes or sandwiches) are being bought for re-sale, then the mind boggles as to the commercial model.

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Replying to Hugo Fair:
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By Leywood
12th Jun 2022 12:41

Well there is that, but practically speaking don’t most of them do it? All the ones I’ve come across do, even some of the big chains do it occasionally. For several reasons, not least them being open late at night when they run out of things and wholesaler isn’t; sometimes a hell of a lot cheaper on some products. Have a local one, not a client, who hoovers up a certain bread range from Aldi as soon as they open each day.

Perhaps the boss doesn’t know staff are doing it when he/she is absent, so it’s worth having a word.

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Replying to Hugo Fair:
Scalloway Castle
By scalloway
12th Jun 2022 13:26

It depends what is available in the area. Tesco and the like have very efficient supply chains so for basic items the price and quality it can be just as easy to go there. Pre-pandemic when I went to my local Tesco I would frequently meet a local restaurateur stocking up.

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By DKB-Sheffield
12th Jun 2022 16:33

I do split it out. But in catering, I'd generally be splitting a lot of bills anyway (food, liquor (assume not in this case), disposables, guest supplies, cleaning, owner's toiletries, daughter's comics... and everything else the client buys on a shopping trip to their favourite supermarket!)

I've a few clients the 'the trade' (catering), and yes, all of them have - at some point (some more often than others) - purchase from Tesco, Aldi, Morrisons, Co-op, 8 'til late etc. There is, and will often be a VAT split - but then, there often is with wholesalers and traditional delivery suppliers so, it's no different to them (apart from the lack of a VAT breakdown).

QBO is actually easier than some others (e.g. Sage50) in that you can enter multiple line items in the 'Bill' or 'Expense' entry screen - assigning nominal codes, VAT codes etc. to each line (you can - of course achieve this in Sage50 but the entry is not as clear and you have to ensure the key IDs match).

I wonder whether you're actually using Receipt Snap or a 3rd part add on as opposed to hard entry into 'Bills' or 'Expenses'. Receipt Snap is a pain (I don't use it as a rule). The OCR is poor, the assignment of suppliers & nominals is rubbish, the default view is too small, the approval process is clumsy, and the inability split transactions into line items (having to edit the transaction to reach that goal) was a key function that has been omitted from the 'build'. If you're working from images, and need line items, use AutoEntry, Dext, or Hubdoc - don't use Receipt Snap - your time is more precious than the fees of the others!

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By JD
12th Jun 2022 20:30

Quick books does allow for import from csv/Excel. Invite the client to complete a simple summary sheet for any suppliers with significant oddities. At least the client will appreciate your time doing it, when they give up or they are motivated to be a bit more structured in their shopping.

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Morph
By kevinringer
16th Jun 2022 09:47

It's one of joys of digitisation. And most of my clients buy their business supplies with their regular groceries and highlight what is for the business. HMRC's stance is that somehow this is automated. I don't know how. If HMRC were given a box of records for a typical client and were told to digitise them, HMRC would then realise the amount of work involved.

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By tracey2412
16th Jun 2022 09:55

has QB got a mobile app? I use Sage Cloud & it has a mobile app where I 'encourage' clients who get such receipts (coffee, supplies, etc.) to enter them on the app & upload the receipt so then they can lose it.
It's even possible with a bit of training & if the purchases are the same stuff all the time to each them what is VATable & what not.

Curious - how do they stand at a normal Tesco receipt not being a proper VAT receipt (ie it doesnt split it out?)

But I feel the pain - years ago we joint owned a pub & did the weekly shop at Costco & other wholesalers & it was always a hated job to split out the receipt. But I got real quick at it!
To the reply which said why are they shopping at Tesco when wholesalers must trump prices - not always true. For Vodka & Baileys especially on offer in Tesco, none of the suppliers could ever touch it by the time you worked back the VAT.

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By David Gordon FCCA
20th Jun 2022 13:31

Maybe I am getting too old for this.
But again I do not understand the query.
My understanding is, regulation requires a receipt for every transaction. It does not require breaking down that receipt into itty bitty bits.
So, as long as your system may handle, Zero, Standard, and £Value, VAT entries, you are away with it, you enter Gross, £value Vat, Net is automatic
The VAT form does not ask us to split costs between VAT rates, it just asks for a total of costs net of vat.

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Replying to David Gordon FCCA:
Scalloway Castle
By scalloway
20th Jun 2022 13:53

David Gordon FCCA wrote:

The VAT form does not ask us to split costs between VAT rates, it just asks for a total of costs net of vat.


Tesco receipts do not give a breakdown by VAT rate. If you want to reclaim VAT you need to go through them to identify the VATable items, then do a manual calculation to work out the VAT from the gross figure given on the receipt.
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Replying to scalloway:
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By Hugo Fair
20th Jun 2022 14:08

Only a few months ago two of our resident VAT experts seem to disagree with you ... see https://www.accountingweb.co.uk/any-answers/claiming-vat-from-supermarket
In particular:
* Les Howard on 03rd Nov 2021 11:22
and
* Jason Croke on 03rd Nov 2021 12:17

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