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SheilaMcC
Level 2

Changing from Standard to Cash Accounting VAT

A client wants to move from Standard to Cash Accounting VAT.  I have done this before on QB Desktop but never on QBO.  Can I confirm the steps to take please? 

Also, am I right in thinking that the effective date used would be the first month of the first VAT return ever recorded for the business in QBO?  So this could go back several years? 

Many thanks

Solved
Best answer June 24, 2021

Accepted Solutions
GeorgiaC
QuickBooks Team

Changing from Standard to Cash Accounting VAT

Hi SheilaMcC, thanks for your post

 

That's right, the effective date should be set to the start date of the first recorded return in QuickBooks online to ensure cash transactions that have not been closed are not missed from the open return. We also recommend that you switch methods after a filed period has been submitted; once you select Save, QuickBooks will change the accounting scheme from that day onwards and will retrospectively adjust the liability amounts.

 

When preparing your first VAT return after switching the scheme you'll see an 'open transaction' column, this accounts for the transactions that were applicable on standard and aren't on cash or were not applicable on standard and are on cash.

 

If you'd like to see how the open transaction figures are generated, you can run the VAT detail report on cash from the effective start date to the day before the open period and export the report, and then do the same date range on accrual and export, then compare the transactions, whatever is on accrual and not cash is a positive open amount, what is on cash and not accrual is a negative open amount. 

 

Hope this helps 🙂

View solution in original post

2 REPLIES 2
GeorgiaC
QuickBooks Team

Changing from Standard to Cash Accounting VAT

Hi SheilaMcC, thanks for your post

 

That's right, the effective date should be set to the start date of the first recorded return in QuickBooks online to ensure cash transactions that have not been closed are not missed from the open return. We also recommend that you switch methods after a filed period has been submitted; once you select Save, QuickBooks will change the accounting scheme from that day onwards and will retrospectively adjust the liability amounts.

 

When preparing your first VAT return after switching the scheme you'll see an 'open transaction' column, this accounts for the transactions that were applicable on standard and aren't on cash or were not applicable on standard and are on cash.

 

If you'd like to see how the open transaction figures are generated, you can run the VAT detail report on cash from the effective start date to the day before the open period and export the report, and then do the same date range on accrual and export, then compare the transactions, whatever is on accrual and not cash is a positive open amount, what is on cash and not accrual is a negative open amount. 

 

Hope this helps 🙂

View solution in original post

SheilaMcC
Level 2

Changing from Standard to Cash Accounting VAT

That's perfect.  Thanks very much!

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