I run a shop / restaurant. I sell a lot of produce in my shop (which is zero-rated), and cooked meals in the restaurant (which has 15% VAT).
Due to my business model, I log the revenue made on a weekly basis. So this means that I don’t use invoicing on Manager (I have a seperate POS that all my sales are run through), I just use Manager for accounting
I’m struggling to figure out how to log my VAT revenue and my Zero Rated revenue on Manager. I’m logging my expenses just fine, but I don’t know how to offset the VAT with my revenue, can anyone help?
It is worth stating that Manager automatically offsets VAT on sales and purchases as long as you apply the same tax code when recording both. For zero-rated sales, either use a 0% tax code (to show they are zero-rated) or no tax code at all. For taxable sales, apply a 15% tax code. For all purchases where you are assessed VAT by your suppliers, apply the same 15% tax code (assuming they are taxable at that same rate).
There is no reason not to post all tax codes to the same tax liability account as long as they are payable to the same authority. (It won’t matter for the zero-rated code, but you did not mention if there are other rates involved in your jurisdiction for other types of goods or services.) If you want to keep them separate, however, for visibility, you can use multiple tax liability accounts.
I log my sales as a New Receipt, however I receive revenue through card and cash. So I usually log my revenue from cash sales and then my revenue from speedpoint sales seperately, so as to balance my Bank Reconciliation.
In doing this, how would I separate the vat-able revenue? Here’s an example:
My total cash up is R4,000
the total received in cash is E1,200
and the balance is received by speedpoint: E2,800
the vatable revenue from this day is E3000 and the zero-rated is E1,000
usually I would log the cash revenue (E1,200) and speedpoint revenue (E2,800) separately - but now that I am VAT registered, how would I log it so that the applicable vat revenue can offset my vat expenses?
If you want to record the cash and speedpoint separately, you will have to split 1,200 cash revenues into zero-rated and 15% and similarly for the 2,800 speedpoint revenues.
1. Using Inter-account Transfers
I would create a single receipt to a cash account called POS Cash that contains the following lines:
1000 @ 0% VAT
3000 @ 15% VAT
Then I would create two Inter-account transfers paid from POS Cash, one received in cash and another received in Speedpoint.
2. Using Sales Invoices
I would create a single sales invoice to a customer account called POS Customer that contains the following lines:
1000 @ 0% VAT
3000 @ 15% VAT
Then I would create two receipts for that invoice one in cash and another in Speedpoint.
Personally, I prefer the sales invoice because I think Inter-Account Transfers over complicates reconciliation so I avoid them at all costs. Also, the sales invoice accomodates more complicated situation like unpaid orders, re-invoicing of orders … etc
Here’s an example of a Sales Invoice I’ve logged under POS Customer:
Sales - VAT - E2,734
Sales - Zero Rated - E557.3
Total - E3,291.2
Includes VAT - E356.61
As you see the E356.61 doesn’t equal 15% of the VAT sales or of the Total, so I’m not sure how Manager came up with this amount? And how do I fix it so it can correctly display the actual VAT amount (15% of E2,734)?
I have set it up already under Tax Codes as single rate 15%, and my VAT always balances when I log my purchases. So it seems to only be an issue when logging my Sales Invoices, do you know why this would be?