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Moving to Kashflow - Using cash accounting for VAT

Moving to Kashflow when using Cash Accounting for VAT - opening balances

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I am currently looking at moving from VT to Kashflow for a client that uses the cash accounting scheme for VAT. VT deals with cash accounting by using a separate VAT provision account for the VAT on invoices, which is then transferred to a VAT control account when the invoice is paid to the bank.

I have figured out how to turn cash accounting on in Kashflow and have entered a trial balance to test, however there is a problem. VAT on any invoices paid in the current period show up correctly on the vat return. Unfotunately the VAT on the opening trial balance (the VAT provision - which represents VAT on invoices which have not yet been paid by the customer (and therefore not yet due)) is immediately transferred to the next VAT return irrespective of whether the invoice has been paid or not. This defeats the purpose of cash accounting, and also means that the VAT is put onto the return twice in error (once from the opening trial balance, and then again on payment).

There seems to be a setting under "settings - advanced - enable VAT reconciliation" which if I read it correctly should correct this, however having turned it on and off a couple of times it does not seem to do anything.

I did have a word with technical support, but am not sure they fully understood me as they did not answer the question which is regarding the opening balance of the VAT provision. Was just wondering if anyone had any experience of how to deal with this.

Thank you.

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By fpdbookkeeping
05th Jun 2017 14:39

Ignore me. Have located a separate nominal code (VAT liability) account to post the opening balance to, which does not flag the balance in the next vat return.

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