Most bookkeeping can be caught up. A receipt found in a coat pocket in March is still a valid receipt for a purchase in January. The amount does not change while it sits there.
Some numbers are not like that. They are true at one instant, and after that instant nobody can recover them — only approximate them. Those are the ones that quietly make a set of accounts slightly wrong, and nobody notices because slightly wrong looks exactly like right.
The number in question
When a customer pays you in something that is not sterling, VAT is due on the sterling value of that supply at the time it was made. Not the average that quarter, not the rate on the day you did the books. The value at that moment.
A payment at 14:32 on a Tuesday in August has exactly one correct sterling value, and it exists for about a second.
If it was not captured then, what you have in January is a reconstruction: take the day's average, or the month's, apply it to everything, and move on. It will be close. It will not be the figure, and there is no way to get back to the figure.
Why close is a problem
Because it compounds, and because it is undefendable.
Four hundred transactions, each a little out in whatever direction the day moved, produce a VAT figure that is out by an unknown amount in an unknown direction. Small, probably. But if anyone asks how you arrived at box 6, the honest answer is that you estimated it — and an estimate is not a record.
It also breaks the thing underneath. The sterling value on receipt is not only the VAT figure; it is the base cost of the asset you now hold. Get that wrong and every disposal calculation built on it inherits the error.
You cannot reconstruct a moment. You can only approximate it and hope nobody asks how.
What capturing it properly looks like
The payment arrives. Within that second, before anything else, the sterling value is recorded against that transaction with its own timestamp and the source of the rate. It is written down, permanently, as a fact about that transaction rather than something derived later.
Everything downstream then works off a real number:
- The VAT returnBuilt from recorded values rather than reconstructed from a rate table.
- The base costThat figure enters your Section 104 pool at the cost it actually was.
- Every disposal after itMatched under the same-day and thirty-day rules against correct costs, with a dated calculation your accountant can check.
- The income itselfTrading income at the right figure, in the right period, against the right customer.
The wider point
This is the actual reason accepting stablecoins has been a nuisance for businesses, and it has nothing to do with the payment. Taking the money is easy. Recording it in a way that survives a conversation with HMRC is the part that has stopped everyone.
Which is also why it was never going to be solved by a payment company. Payment companies are excellent at moving money and have no interest in your nominal codes. The work is in the accounting, and the accounting is unglamorous enough that nobody wanted to do it.
When a sterling stablecoin arrives, most of this problem disappears. The sterling value of a sterling stablecoin at the point of supply is not in dispute — it is the number on the invoice.
The capture still happens, because the discipline is the same and the records still have to exist. But the arithmetic stops being interesting, which is the best thing that can happen to arithmetic.
Every payment into Ceodore is valued in sterling at the moment it lands, against the invoice it belongs to, before anything else happens.