using journal entry to claim unclaimed vat on reconciled tra

[michelehurst]

Hi, using a customer sage 2007 line 50 did not realise a farm corn sale (T9 no vat) had weighbridge contra payment included in balance T1 so did not enter vat and reclaim. the sale has been reconciled so I understand I can use journal entries to claim vat but cannot understand how to do it. Can anyone tell me in idiot proof language! there were 4 or 5 transactions to do. Thanks.

[brucedenney]

You CAN NOT use journal entries to claim VAT.

I don't understand why the T9 (outside the scope of VAT) code was used for farm corn sale, as a food stuff I would think it is zero rated and should be entered as a T0 (Zero Rated VAT) sale.

I don't understand what a "weighbridge contra payment" is.

As I understand it a weighbridge is big weighing machine that weighs both lorry and contents and in this context I imagine is a service that you or your customer (or perhaps jointly split between the two of you) bought to determine the weight of the corn sold.

The use of the word contra is confusing, the expense of weighing you product is a cost of producing it, just like the seed, tractor fuel, labour and so on.

I guess that your customer might have paid the weighbridge bill for you and you are looking to reimburse him for his expense and rather than giving him the cash, you have knocked this off the bill. But this is speculation..

I think we need to go back to basics.

What transactions have you entered.

1/ relating to the sale of the corn (invoicing and customer receipts)
2/ relating to the weighbridge charge (invoice and customer payment)

Perhaps if you summarize the transactions with a round number example that would help.

[michelehurst]

Thanks for your reply.
You are right sorry , wheat sales are T0.
I entered the total sale amount (say £5000 for sake of argument) as t0 but in fact on the receipt there is a charge for use of weighbridge i.e. actual sale amount was say £5047 but weighbridge charge applied was £40 + VAT. I should have entered £5047 and then entered a contra entry of £40 + VAT so that £5000 was the income but that I claimed vat back on the expense of the weighbridge. There were about 5 transactions entered like this. Can I just enter the weighbridge charges as expenes on their own and claim the vat. the prob with doing that would be that bank record would then contain unreconcilable amounts.
Confused!!!
Michele

[brucedenney]

To make sure I have it right ...

-------------------------------------
3 transactions have happened in real life.

You sold them grain

Sales invoice T0 £5047 VAT £0 Total £5047

They sold you use of weight bridge

Purchase invoice T1 £40 VAT £7 Total £47

They paid you the balance of £5000
-----------------------------------------

The question is what did you post in Sage

I suspect only 2 transactions

Sales invoice T0 £5000

They paid you £5000

------------------------------------------

If this is the case .... then

The payment to you is correct.

The sales invoice is wrong

So to fix it you need to reverse the sales invoice with

Sales credit T0 £5000

You now need to make the correct entries.

Sales invoice T0 £5047 VAT £0 Total £5047
Purchase invoice T1 £40 VAT £7 Total £47

Match the £5000 to the £5047

To match the £47 on the supplier account to the £47 on the customer account. You now do a contra.

Tools>Contra Entries

Select the appropriate customer and supplier accounts, highlight the matching outstanding £47 transactions on each account press ok

(Because the transactions match each other off in the bank it doesn't really matter which bank account you use, I tend to use a petty cash or spare account with reconciliation turned off, so don't have to bother matching them on the bank rec. Not a big deal to do it in the main account I know, I hate any extra work)

[michelehurst]

Thanks so much. However, I have already reconciled the transaction. Will it still reverse??

Thanks so much for all your time
MIchele

[brucedenney]

We are not using the sage reversing option, we are reversing it by adding an extra transaction, so yes, it will work.