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Quickbooks Question

Vat on Deposits in advance

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Help please - I have a client who has a couple of issues with Quickbooks Desktop as follows:-

1. He receives deposits in advance from customers which are posted into QB as unallocated payments on account on their customer account until an invoice is raised when the job is completed which could be several months later. The client is on a cash basis for VAT and I have identified that QB is not reporting the VAT due on these deposits within the VAT100. I have spoken to QB support are no help. Has anybody else had this issue & how have you overcome it?

2. The client has two offices which have been set-up as separate classes in QB. If an A R Receivables Summary Report is run as a whole, then it correctly includes unallocated payments on account received. However if the report is filtered by class to show debtors per office then unallocated payments on account are not included resulting in incorrect balances being shown. Again has anyone else encountered this issue and have you been able to find a solution so that the correct balances are shown. Once again QB support are no help!

Many thanks


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By kevinread
01st Apr 2019 13:29

I'd recommend setting up a service item called 'Deposit' (with a standard VAT code) linked to a balance sheet nominal called ''Customer Deposits' under Other Current Liability. Use this item on either a sales invoice or sales receipt and then use the item as a negative amount when deducting the deposit on the (final) invoice. This will work for VAT cash accounting.

Then customise & save a report grouped by customer to show the deposits account. Even better use the bank rec to reconcile (match) the deposits in and out leaving the uncleared representing the deposits in hand.

Pm me if you need any help,

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