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Flat rate sales invoices on SAGE Accounting

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Good morning

I am trialling SAGE Accounting Standard for our little business that uses the Flat Rate Scheme. We issue around 100 invoices a week with values up to £50.

When entering a sales invoice on SAGE, there appears to be no flat rate option. Only the usual standard, exempt etc.

I contacted SAGE asking how the system deals with flat rate and they were not helpful at all. Just pointed me to the VAT detail on the financial settings screen which I had already set up.

Am I missing something important as I cannot imagine it is not configured for FRS.

I have searched for previous questions and could not see anything.

Also, if you think SAGE is really not the answer, any guidance will greatly appreciated.

Many thanks in advance. Ian

Replies (13)

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By rmillaree
20th Nov 2021 11:08

"When entering a sales invoice on SAGE, there appears to be no flat rate option. Only the usual standard, exempt etc."

Are you aware that the flat rate only affects your calculation of output vat and input vat for vat return purposes - as far as sales invoices are concerned you MUST invoice as normal adding 20% vat. Ie you still bill 20% vat to customers presuming work is standard rated !!!!
Flat rate is soooo easy to get wrong - reading notice 733 in detail is highly recommended so you dont come a cropper

"Am I missing something important as I cannot imagine it is not configured for FRS."
Its unhelpful that sage are unhelpful - sage does have articles covering what to do though - starting point here. If you can't follow this guidance then you really shoulkd seek assistance.

https://help.accounting.sage.com/en-gb/accounting/tax/flat-rate-vat.html

Sage is very cumbersome with regard to flat rate adjustments unfortunately.

"Also, if you think SAGE is really not the answer, any guidance will greatly appreciated."
Well you need an answer - the problem is vat returns via software are probably akin to doing a car service - it may take professional competence. Highly highly recommended you get acountant to give vat returns and new systems once over if you have the slightest doubt what you are doing is correct.
If you have decent accountant for year end stuff they should assist you here (for a fee) - the level of practical assitance they provide in situations like this is a decent test of how good they are. Perhaps decent book-keeper who is sage cloud experienced may also help. feel free to pm me if you can't sort or find local assiatance and need help.

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By williams lester accountants
20th Nov 2021 12:51

Get an accountant asap, before the wheels really come off......

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RLI
By lionofludesch
20th Nov 2021 19:40

You've got the wrong end of the stick there, fella.

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By philcollis
21st Nov 2021 10:57

Many people do not understand the reason why the flat rate scheme was introduced.
It was meant to make it easier for smaller businesses to calculate their VAT by not having to account for both input and output tax.
Sage is a full accounting system so there's no problem with accounting for input and output tax and VAT Returns, being automatic.
If you insist on staying in the flat rate scheme then raise sales invoices as normal with 20% VAT added, and enter all expenses as NO VAT.
At the end of the quarter, just calculate the flat rate VAT on total turnover including VAT, then journalise the difference between the flat rate you calculated and the output tax shown in Sage by debiting the VAT account and crediting sales with the same amount.

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Replying to philcollis:
RLI
By lionofludesch
21st Nov 2021 11:13

What a surprising number of folk don't seem to grasp is that your sales invoices need to show the same 20% VAT for standard rated goods, not the flat rate percentage.

Ian seems to fall in that category.

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Replying to lionofludesch:
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By Hugo Fair
21st Nov 2021 13:09

"Ian seems to fall in that category" ... seems likely from the little info provided.
But we may never know as he has posted 2 questions in 7 years and responded zero times.

Of course "When entering a sales invoice on SAGE, there appears to be no flat rate option .. only the usual standard, exempt etc" begs the question of what VAT rate is being shown on actual sales invoices? And how many will now need 'adjustment'?

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Replying to Hugo Fair:
RLI
By lionofludesch
21st Nov 2021 13:14

Hugo Fair wrote:

"Ian seems to fall in that category" ... seems likely from the little info provided.
But we may never know as he has posted 2 questions in 7 years and responded zero times.

Of course "When entering a sales invoice on SAGE, there appears to be no flat rate option .. only the usual standard, exempt etc" begs the question of what VAT rate is being shown on actual sales invoices? And how many will now need 'adjustment'?

I'm guessing zero. If the fella was dealing with folk who could reclaim the VAT, I would imagine somebody would've mentioned it by now.

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Replying to lionofludesch:
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By Hugo Fair
21st Nov 2021 13:38

True, but (like so much else) we don't know what is being sold or to whom - let alone whether purchasers are VAT registered.
Many MPs (members of the public not that other lot) just look at the total cost - so if it's advertised as £35 inc VAT and they pay £35, they don't concern themselves with any portion being a VAT element (let alone whether it's correctly calculated).

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Replying to Hugo Fair:
RLI
By lionofludesch
21st Nov 2021 13:43

Hugo Fair wrote:

True, but (like so much else) we don't know what is being sold or to whom - let alone whether purchasers are VAT registered.
Many MPs (members of the public not that other lot) just look at the total cost - so if it's advertised as £35 inc VAT and they pay £35, they don't concern themselves with any portion being a VAT element (let alone whether it's correctly calculated).

Exactly. Anybody not claiming the VAT back won't need a new invoice.

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By thegooner
21st Nov 2021 15:43

Thank you everyone for your replies.

I find accountingweb a useful resource to find information on many subjects from very experienced people.

I wrote a very quick query specifically related to treatment of flat rate schemes on SAGE as SAGE themselves were not helpful at all.

At the moment, we have an archaic situation with written invoices that are then entered on Excel to calculate the flat rate before uploading to HMRC. This has been done for 6 years since we started using the flat rate scheme.

I want to start automating this and assumed there would be a way on SAGE to “automatically” show flat rate situation at time of posting without having to “mess about” with journals etc. Sadly, I was wrong.

If I post again, I will be sure to provide much more information. I did not want to take up too much time of those kind enough to reply.

Thanks again for answering my question. Ian

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Replying to thegooner:
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By Paul Crowley
21st Nov 2021 15:55

I just look at sales bankings for the quarter for for FRS
But the point about making a journal is that the sage sales per TB will be wrong as it will be showing net of 20%
If the invoices are paper, then just work from the bank account
Analyse gross income as income and payment of VAT as negative income

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Replying to thegooner:
RLI
By lionofludesch
21st Nov 2021 16:06

thegooner wrote:

Thank you everyone for your replies.

I find accountingweb a useful resource to find information on many subjects from very experienced people.

I wrote a very quick query specifically related to treatment of flat rate schemes on SAGE as SAGE themselves were not helpful at all.

At the moment, we have an archaic situation with written invoices that are then entered on Excel to calculate the flat rate before uploading to HMRC. This has been done for 6 years since we started using the flat rate scheme.

I want to start automating this and assumed there would be a way on SAGE to “automatically” show flat rate situation at time of posting without having to “mess about” with journals etc. Sadly, I was wrong.

If I post again, I will be sure to provide much more information. I did not want to take up too much time of those kind enough to reply.

Thanks again for answering my question. Ian

Sadly, you're going to need a bespoke system to do that. How much are you prepared to pay?

The alternative is to do a lot of, ultimately pointless, work. My advice would be to run with it.

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cd
By Chris Downing
22nd Nov 2021 09:14

Hi, the Flat Rate Scheme and how to apply it in Sage Accounting is documented well here:
https://help.accounting.sage.com/en-gb/accounting/tax/flat-rate-vat.html

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