Hi, can anyone advise on best practice for bank reconciliation if invoices don’t match amount received?
For example, I invoice client directly for sale amount £100.
The client sends payment to my agent.
My agent sends me £90, after having taken their 10% commission.
So I am left with an invoice I have raised for £100 - but my bank account is only showing a £90 payment so it doesn’t link the two. When I try to tag the bank account entry, it can’t find the correct amount. I read somewhere online that I should put the agent commission down as an expense but I can’t find this on the banking section.
Any advice gratefully received - and the simpler the better!
You would set up a extra bank account for the Agent in the banking screen to reflect what has happened in real life, here is a breakdown of the transactions.
Pay the £100 invoice using this account This represents the client paying the agent the £100
Record a bank transfer from the agent account to your bank account for £90 This represents the agent paying you the money less their commission
Record a purchase invoice for the agent commission fees and pay it using the agent account This is you paying the agent fees
Once complete
The agent account balance will be nil.
The sales invoice for the client will be paid in full
The purchase invoice from the agent will be paid in full