How do I process a receipt if I am Cash Accounting (and a low turnover firm)?
Article ID
ias-11914
Article Name
How do I process a receipt if I am Cash Accounting (and a low turnover firm)?
Created Date
24th April 2015
Product
IRIS Time and Fees
Problem
How do I process a receipt if I am Cash Accounting (and a low turnover firm)?
Resolution
Contents
- Introduction
- Introduction to low turnover firms (that are cash accounting)
- Posting a VAT receipt
- Account for VAT by ticking “account for VAT” on the receipt.
Introduction
This knowledge based article will provide a brief description of cash accounting for low turnover firms. It will explain how to set your Fees options for low turnover firms and how to post your invoices and receipts so that you account for VAT correctly.
For example, an invoice is posted on 1st January for £100 at 15% VAT rate (£115.00 gross). The practice receives the receipt for this invoice on the 20th January, which is then immediately matched. By matching the receipt to the invoice a VAT receipt it produced, making the VAT liable as at the 20th Jan.
Introduction to low turnover firms (that are cash accounting)
Setting your fees options to ‘low turnover firm’ is a method of cash accounting which can only be used by a practice whose turnover is below a certain threshold.
VAT is not accountable when you post an invoice, but is accountable when a receipt is
- Posted and matched to your invoice or
- Posted with VAT accounted on it
Set your fees options to low turnover
Before making any postings, it is recommended you set your VAT options in Fees Ledger.
- Log on to IRIS Fees from the IRIS Main Menu as Master.
- Click on Options | Fees Ledger.
- The Fees Ledger Screen will be displayed, in the General tab, under the General Options, place a tick next to Low turnover firm(i.e. for VAT purposes)
- Ensure that there is not a tick next to ‘Not low turnover firm but invoices are normally proforma’.
- Click on the OK button to save the Changes.
Posting a VAT receipt
Accounting for VAT by matching receipt to an Invoice. You would need to post the Invoice, and the Receipt, and then match them together.
How to post an Invoice
- Log on to IRIS Fees, from the IRIS Main Menu.
- Click on Posting |Adhoc posting.
- You may be prompted to select the Fees period that you would like to make the posting to. Make the appropriate selection; Fees Posting to Period XXXX/XX screen will be displayed.
- Under the Posting Type Section select ‘Invoice’. Enter the Client, Date, Amount and VAT rate details in the fields provided.
- Click on the Post button.
Posting a Receipt.
- Log on to IRIS Fees, from the IRIS Main Menu.
- Click on Posting |Adhoc posting.
- You may be prompted to select the Fees period that you would like to make the posting to. Make the appropriate selection; Fees Posting to Period XXXX/XX screen will be displayed.
- Under the Posting Type Section select ‘Receipt’. Enter the Client, Date and Amount details in the fields provided.
- Click on the Post button.
Matching Receipt to the invoice.
- Log on to IRIS Fees, from the IRIS Main Menu
- Click on Posting | Matching
- You may be prompted to select the Fees period that you would like to make the posting to, make the appropriate selection.
- Fees Ledger Manual Matching Screen will be displayed, enter the Client ID.
- Highlight the receipt that was posted and click on the Match button.
- The Match Fees Ledger Posting Screen will be displayed, double click on the invoice that you would like to match it to.
- Click on the Back button, and then click on the update button
Accounting for VAT by ticking the”Account for VAT” option when posting the Receipt
You may need to account for VAT when posting a receipt. For example when an invoice has not been posted, but the client is paying by standing order or paying in advance.
To post a receipt with VAT:
- Log on to IRIS Fees from the IRIS Main Menu.
- Click on Postings | Adhoc Postings.
- Select the Fee Ledger Period for the posting and click on OK.
- Fees Posting to Period Screen will be displayed. Click on Receipt under Posting type.
- Enter Client details, (or click on the spy glass, highlight the Client and click on the Select button).
- Enter the date (or click on the spy glass , highlight the click on the date the posting needs to be made to, click on the select button).
- Enter the Amount. For example £100.
- Enter Reference details. For example INV001.
- Place a tick on “Account for VAT” and select a VAT rate.
- Click on the post button.
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