When I take over a new client, I don't just look at whether the bookkeeping is correct.
I also ask myself:
"Can I make this easier?"
Recently I was reviewing a client that is partially exempt for VAT.
If you've dealt with partial exemption before, you'll know it can quickly become one of those quarterly jobs that nobody looks forward to.
Every quarter I'd have to work out:
Finding the right VAT was.
So I changed the bookkeeping instead.
Rather than identifying the exempt VAT every quarter, I introduced a dedicated VAT code in QuickBooks called ResVAT.
Now, whenever I post a purchase that relates directly to the residential lettings, I code it there immediately.
Everything else follows the normal VAT treatment.
It sounds like a tiny change.
But it means that when the VAT quarter ends, I already know exactly how much VAT relates to the exempt supplies.
No searching.
No highlighting invoices.
No wondering what I did three months ago.
The result?
My quarterly partial exemption working papers are now much simpler.
I can clearly separate:
Small improvements add up
One of the things I enjoy most about bookkeeping isn't just getting the numbers right.
It's improving the process.
If I can spend ten minutes making a bookkeeping system better today, it might save an hour every quarter for years to come.
Those are the improvements that clients rarely see...
...but they benefit from every single time I prepare a VAT return.
Sometimes the best bookkeeping isn't about working harder.
It's about designing a system that makes the right answer easier to find.
I also ask myself:
"Can I make this easier?"
Recently I was reviewing a client that is partially exempt for VAT.
If you've dealt with partial exemption before, you'll know it can quickly become one of those quarterly jobs that nobody looks forward to.
Every quarter I'd have to work out:
- Which VAT related to the commercial properties?
- Which VAT related to the residential properties?
- Which VAT should be apportioned?
- Then perform the partial exemption calculation.
- Then carry out the de minimis test.
Finding the right VAT was.
So I changed the bookkeeping instead.
Rather than identifying the exempt VAT every quarter, I introduced a dedicated VAT code in QuickBooks called ResVAT.
Now, whenever I post a purchase that relates directly to the residential lettings, I code it there immediately.
Everything else follows the normal VAT treatment.
It sounds like a tiny change.
But it means that when the VAT quarter ends, I already know exactly how much VAT relates to the exempt supplies.
No searching.
No highlighting invoices.
No wondering what I did three months ago.
The result?
My quarterly partial exemption working papers are now much simpler.
I can clearly separate:
- VAT recoverable in full
- Residual VAT to be apportioned
- VAT directly attributable to exempt supplies
- Blocked VAT
Small improvements add up
One of the things I enjoy most about bookkeeping isn't just getting the numbers right.
It's improving the process.
If I can spend ten minutes making a bookkeeping system better today, it might save an hour every quarter for years to come.
Those are the improvements that clients rarely see...
...but they benefit from every single time I prepare a VAT return.
Sometimes the best bookkeeping isn't about working harder.
It's about designing a system that makes the right answer easier to find.
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