VAT Cash accounting doesn't pick up the payment if the inv is dated in a later vat period. & If you have payments on account from customers they only show if matched.

Hi there, @suzie13.

The information reported on the VAT return are those paid Invoice/Bills or Expense/Bank Deposit. For example, you have an invoice for January, and payment is in April. The invoice will be reported on the Vat return in April and not in January. Thus, it's not the payment that reports on the VAT return that is the invoice where the payment is applied. 

To know more about handling your VAT returns, see these helpful articles:

• How to submit a VAT Return for HMRC's Making Tax Digital
• Submit a VAT return in QuickBooks Online

If there's anything else I can do for you concerning QuickBooks, feel free to reach back out. I'll be more than happy to assist. Have a great day.

Hello, 

yes the problem is if the payment is made ahead of the invoice or payments on account as per my examples. In these circumstances it does not bring the amounts up in the VAT return. This is a function that had been around for years in the likes of Sage so I'm surprised its not a function in QBO. If I am invoicing for July to September rent, the invoice date should be 1st July but if the payment is made on 30th June, ahead of the invoice date, cash accounting will not bring up the payment. I have put this client back on accrual accounting because of this problem. 

And my other example where customers pay monthly to spread the cost for an annual invoice, if the invoice isn't raised until the work is actually done the payments are put to the customer and debtors which are matched against the invoice once its raised, VAT cash accounting does not pick up these unmatched POA's.

Hello Suzie13, Thanks for the further detail, how are you recording the payments on account are you doing a deposit or a receive payment or credit note and then applying to the invoice on the 1st?

We do a deposit to payee and debtors, which I believe has the same affect as a receive payment as I just tested it. Neither come up on the VAT return. 

Hi, could you tell me what the journal would be. 

eg

Dr Bank £100 - no payee or VAT selected

Cr Debtors £100 payee 20%VAT

This then automatically says the journal is out because of the VAT. The £100 needs to go to debtors and bank. See attached print screen of the bottom of the journal screen. 

Hi Suzie, We can not see the attached journal could you possibly attach this again. Thanks

Hi,  I couldn't get the attachment to work.

What should the journal be as I couldn't get it to balance.

Thanks for posting here again, @suzie13,

When creating journal entries in QBO, we always do recommend seeking help from an accounting professional to posts the correct entry to the right accounts. For now, I can share the journal entries used for each VAT action in the program.

For filed VAT, the JE is debiting VAT Control and crediting VAT Suspense. Now, when you make a VAT payment, you debit the VAT Suspense Account and credit the Bank Account for the payment.

Also, if you need further help with this you can get in touch with our Support Team to help you with this. Our representatives can walk you through the process and help you further with VAT posting. Here's how to contact us:

1. Go to the (?) Help menu to open the QB Assistant box.
2. On the page, enter Contact Support.
3. Pick Live Chat to connect with our live representative.
   
4. Once done, click the Live Chat link provided in the pop-up box.
   
5. On the next page, enter "VAT" then Let's Talk.
6. Lastly, select Start a chat.

Let me know if you need further assistance with this. I'll be more than happy to share some more insights to help you. Have a nice day!

Here we are now May 2022 some 12 months since this post and Would you believe it something as basic as this still not sorted out. I have this exact problem now. Journal.is a work round buy guys ... please...  come on ...