For the Cash Basis of Accounting for VAT, VAT on Sales is based on Cash Received rather than on Sales Invoices.
There are two ways in Big Red Cloud to account for VAT on a Cash Received Basis:
Method 1: Analyse Cash Receipts for VAT when entering transactions.
To use this method in Setup / Options select Yes for ‘VAT on Cash Receipts ?’
This option is only available when ‘Receipts/Payments Manual Allocation ?’ is not selected.
This method relies on you to analyse the VAT on Cash Receipts.
When this option is switched on Cash Receipts and Opening Balances already entered will not have been analysed for VAT. If these transactions are to be include in a VAT Return made on the Cash Basis of Accounting for VAT they will have to be changed and the VAT Analysis made.
Two additional reports to be available on the Cash Book Reports menu, Cash Book VAT Details and Cash Book VAT Summary.
Cash Book VAT Details report lists entries made in the Cash Receipts Book and shows how each entry was analysed for VAT purposes. The user will have originally entered gross amounts (including VAT) for each receipt; this report shows the VAT and net amounts calculated for each entry. The Cash Book VAT Summary report produces similar information but lists only Monthly Totals for the period specified.
Method 2: Manual Allocation.
To use this method Allocations must be switched on in Setup / Options. It cannot be used with the VAT on Cash Receipts Option.
When this option is selected VAT on Sales in will be based on the Cash Receipts allocated to sales transactions.
