If you don't send your customer a statement of their account every month they may not know how much they owe you. Not every business is as organised as you and keeps their accounts up to date. A statement to your customer is useful for the following reasons.

The standard time for filing a VAT return is every 2 months. The VAT periods are Jan-Feb, Mar-Apr, May-Jun, Jul-Aug, Sep-Oct, Nov-Dec and they must be filed and paid by the 19th of the following month i.e. Jan-Feb must be paid by the 19th March.

If you do not claim VAT correctly you can either underpay your VAT and the revenue commissioners will look for the money underpaid back with interest and penalties.

If you overpay VAT this affects your cashflow as you are givning money to the revenue commissioners that you did not have to give.

There are six boxes on the VAT return for you to fill in, T1, T2, T3 & T4 and E1 and E2. Here is what you should place in each box and how to get that information.

T1 value = VAT on Sales + Vat on EU Purchases had they been bought in Ireland

T2 value = VAT on Purchases in Ireland + Vat on EU Purchases had they been bought in Ireland

T3 value = Vat on Sales - Vat on Purchases where Vat on Sales is the greater value
(VAT Payment)

T4 value = Vat on Purchases - Vat on Sales where Vat on purchases is the greater value
(VAT Refund)

Only fill in either T3 or T4 and not both of them. Fill in T3 if you must pay the revenue commissioners. Fill in T4 if you are seeking a refund.

E1 value = Total goods sold to other EU countries

E2 value = Total goods bought from EU countries

Sales errors

1. The wrong VAT rate is used on an invoice. Ensure that 21%, 13.5% or 0% are used correctly and if your invoice contains multiple VAT rates make sure each product gets the correct VAT rate attached to it.
2. Someone forgot to add VAT to the invoice. Make sure each time you charge VAT, as if you don't you will have to absorb the VAT your self.
3. If calculating VAT on a cash receipts basis the worng VAT rate is calculated. Separate receipts into different analysis columns i.e 21%, 13.5%, 0% so that you can easily calcualte the correct VAT rate
4. If you are selling to a company in one of the other 26 countires in the EU and not charging VAT, you must put your customers VAT number on your sales invoice and verify the VAT number is a real VAT number (verify vat number here), otherwise you will be made to pay the VAT that should have been charged if no VAT number is supplied or is found to be a fake VAT number. The amount sold to EU countries must be put in the E1 box on the VAT return.

Purchase errors

1. Claiming VAT on items you are not allowed to claim on e.g. VAT on Petrol, VAT on lunches, VAT on Car Leases, VAT on accomodation, VAT on a Car purchase, VAT on Insurance (there is none).
2. Claiming VAT on a purchase where you do not have the purchase invoice. You cannot claim VAT if you do not have an invoice
3. Claiming VAT using a credit card recipt. A credit card receipt is not an invoice. You can not use a credit card receipt it to claim VAT.
4. Claiming the incorrect amount of VAT on an invoice. If you get an invocie that does not have a VAT breakdonw on it, do not assume it includes VAT at 21%. Some items maybe at 13.5% and some at 0%. Make sure you breakdown the VAT correctly.
5. You must separate Resale Purchases and Non Reslae Purchases.
   Resales Purchases are items you will sell on.
   Non Resale Purchases are items you will not sell on e.g. administartion expenses.
6. Forgetting to claim back any VAT at point of entry you may have been charged. If you pay VAT at point of entry you are allowed to claim this back on your VAT return. Always make sure you get the VAT documentation from from your shipping company so that you can claim back the VAT. Without ity you cannot claim back VAT.
7. Claiming duty on imports. Duty on imports is not reclaimable. It is not VAT. It is a cost to you.

EU Purchases (Purchase from the other 26 countries in the European Union)

1. Allowing yourself to be charged VAT on items you import from other EU countries. If you are registered for VAT in Ireland, you can give your VAT registration number to your EU supplier and they will not charge you VAT. If they do charge you VAT it is almost impossible to get the VAT back. If you bought an item from the UK where VAT is 17.5%, your item is now 17.5% more expensice than it should have been.
2. When you buy goods from the EU, you must fill in the E2 box on the VAT return
3. The VAT that would have been charged had the goods been bought in Ireland must also be calculated even though this VAT does not exist, it is required by the revenue commissioners. So ensure tha you do not mix EU purchases with Irish purchases at 0%. They need to be analysed separately.

Suggested VAT analysis rates

SALES

PURCHASES

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(c) Nilsson Denver Ltd 2007

When a lease is taken out a large amount of bookkeeping needs to take place. Simply signing the lease and taking possession of the leased item is not enough. For the bookkeeper things are only starting.

When it comes to your year end, the auditor or accountant will start asking for stuff. One of the biggest problems you and him have is getting together the information for leases taken out during the year.

He needs to know what you bought, when you bought it, did you trade in something against it , who did you lease it form and so on. So with this in mind, here is a checklist to ensure you have all the information he needs and that will make him happy and you look very organised and in control.

As a bookkeeper you can end up acting as a credit controller. While you may have not received any formal training in Credit Control, you are expected to do it. Here are some tips to help you get organised and also you will end up organising everyone else