I've had a bit of back and forth with KF support over this and just need to check if I'm missing something (ie brain matter).
I picked up a KF client a year ago and on checking a VAT return spotted that they had been treating reverse charge expenses as if they were UK. I advised them to make sure the supplier's address showed an EU address as I understood that this would automatically treat them correctly.
It didn't, in the latest return they appear as goods in boxes 2 & 9 and, on further examination, the expense codes in the nominal ledger were ticked as being for EU product, and so I had to untick them to get them treated as services.
It transpires that all purchases (outgoing type) nominal codes default to goods rather than services and when I queried this with them, the response was; "at the time of [KashFlow's] inception and to this day the majority of our users buy goods".
Is that right, do the majority of your KF clients buy goods rather than services from the EU?
Worse was to follow, I then spotted that many more reverse charge payments were going out of the bank to "bank transaction" type nominal codes and here too they were defaulting to goods, however, to my confusion, when I went to edit them, there's no checkbox to switch them to EU services. It transpires that you only see these if you convert the account to an "outgoing" type, so I did that and unticked the "product" check box.
A year ago, a very patient (old greying) accountingweb fellow was kind enough to give me lots of advise on KF and one of his first comments was that the differing account types were difficult to get to grips with and so he advised me to tick the box on the chart of accounts to make all codes available to any part of the system, ie Sales, Bank or Purchases, which I did, and he was right, KF's account types are a weird concept.
So I thought that if the bank payments my client makes for reverse charge services were now posted to these purchase codes that all would be well but, when creating a bank payment, it doesn't look like you can stipulate the supplier and so it appears that they won't be picked up as reverse charge on the next VAT return.
Is that right, is it really the case that the only way my client can recognise RC expenses, for all thos £10s and £6s that leave their bank account each month to the online servises, have to be entered first as "purchases" (ie supplier bills) then paid off?
Sorry for the length of this post but it's taken me ages to get to grips with this topic and, if it's any consolation, I've left out the bit where the support guy explained the reasoning beghind the differeing account types.....even more confusion.
Thanks in advance and, just in case anyone is thinking it, this is nothing to do with points scoring for any other system, my main worry is that my client is now confused and I need to advise them properly.