Lightspeed Retail - Lightspeed Accounting - Xero UK VAT

NickSNickS Posts: 9Member

Hello,

Is anyone out there using Lightspeed in the UK and interfacing with Xero?

We are in the process of migrating to Lightspeed / Xero and I am struggling to find detailed information / recommendations on how to configure the Lightspeed Accounting set up.

I want to make sure I can use Xero for the new Making Tax Digital rules around VAT. That means being able to capture sales and purchases information in the correct way to complete a VAT return.

On the sales side I am not sure which of the 3 options to use: journal, summary invoice or itemised invoice. The first one says not to use if you intend to use Xero sales tax reports (I assume this means VAT?). At the same time I have to have VAT switched on in Lightspeed to make sure we collect the correct VAT from customers. I had been thinking the journal set up would be simplest (not least for reconciling takings more easily). However, Xero will need to track both the sales value and the tax and report the 2 together in the VAT return. So not sure which way to go - I don't want to switch on the syncing until I know where I will end up (as I'm not sure there will be an easy way to change later).

On the purchases side my inclination is to ignore VAT completely in Lightspeed and map everything across to a purchase control account where I can manually match the related purchase invoices and make sure VAT is then properly accounted for (as there are several combinations and permutations).

I'm also not sure how I'm going to deal with accounts receivable. I currently assume I will have to track 'debtors' in Lightspeed (although not obvious how) as the data sent across is just going to get dumped into one current asset account (not a proper AR account as that is a 'restricted' account only used when the sale is actually generated in Xero I believe). This would be Ok were it not for the fact that I believe the 'credit account' details being sent across will also include deposits or payments on account for customers. In the latter case they will need to be treated differently for VAT purposes (no sale being recognised, but VAT nevertheless payable to HMRC) - I think this will need to be a manual workaround each quarter - so long as Lightspeed can identify the genuine deposits at the end of each period!

Has anyone seen a UK 'manual' for Lightspeed / Xero - seems to be sorely missing. Better yet dare I suggest a POS/eComm/Accounting package that all works seamlessly???!

2 comments

  • HowardAHowardA Posts: 1Member
    edited August 22

    I am just trying to set up the same links and facing the same concerns. Did you manage to work out a solution?


    How is the sales and VAT transferring into Xero to comply with MTD?

    Any help you can give will be greatly appreciated

    Post edited by HowardA on
  • NickSNickS Posts: 9Member
    edited September 2

    Hi Howard,

    Just seen this. I'm attaching a screen shot of my Shogo general and tax settings and example of the journal that goes across to Xero (on this particular day no purchases, but if you are interested I can send one of those on a day when there are POs).

    The sales side is actually pretty straightforward. We have the relevant VAT rates set up in LS - primarily 20%. We have a few items (children's clothing) set at 0%. Also if an order is going outside the EU or to an EU company that is VAT registered we can manually set the whole order to be 0%. That all gets transmitted across to Xero pretty cleanly.

    Where we have to take a more manual approach is in respect to purchase orders. I have set up LS to not include any VAT on any POs. I have done this because my colleagues entering POs do not have the experience to determine if something should be zero rated, 20% or subject to reverse charge. Therefore when approving POs in Xero I set the appropriate VAT rate according to the supplier invoice (you have to do this line by line - a shame you can't set every item on the PO in one go - one of the few wishes I have for Xero). You can make other changes / additions at this stage as well - for example adding freight charges (my colleagues generally do this as it is not terribly controversial). I felt it was better having my colleagues concentrate on just the value of the stock before VAT and managing all aspects of inventory without them worrying about tax.

    Give me a shout if you get stuck as the support team aren't always that up to speed with accounting issues despite trying their best.

    Nick



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