I’ve ended up with a duplicate Bad Debt (8100) entry due to not realising what Quickfile was doing but I think there may be a bug as well when the Cancel Bad Debt option is used.
I wrote off as bad debt an unpaid invoice in previous financial year and used write off date as 27/3/2015
I then Cancelled the bad debt via the drop down in the invoice menu, defaulted to today’s date 27/1/2016 (didn’t pay much attention to this at the time)
Had I looked at this stage I would have seen P&L still shows bad debt as 27/3/2015 reducing profit, invoice shows as outstanding.
Wrote of invoice a second time with a corrected date still in the previous financial year now P&L shows double the amount it should under 8100
This time I spotted it so cancelled the Bad Debt, Adjusting the date this time to the previous financial year to get 2 x debits and 1 x credit = correct amount, you’d think but no.
I now have two debits to 8100 in 2014-2015 and two credits to 8100 in 2015-2016 and an outstanding invoice I’d like to show as a bad debt. Your thoughts on how to correct these entries would be appreciated
I’ve ended up with a duplicate Bad Debt (8100) entry due to the reversal of Bad Debt on 4 invoices. I went on to make them credit notes on all 4 invoices and now they appear on the Profit/Loss Report as profit in one financial year, which is wrong. Of course, I recorded them in 2 separate financial years going back and forth with enabling and cancelling the bad debt.
It’s easier to show you that to explain. I think Quickfile recorded them in the journal under 8100 code twice.
EDIT: So, basically, I went back and forth enabling and reversing the bad debt on those 4 invoices, and in the 8100 Nominal Code they appear 4 times as write-offs and 8 times as reversed. See the picture bellow.
Now I understand what I did. If you look at the entries I recorded the write-offs in the 2019 financial year and reversed them. Now the problem is that they appear as profit in the 2020 financial year, so that means I will have to pay corporation tax without any reason. How can I mend this?
Sorry @ian_roberts, I’m very new to all this, and I wasn’t sure what I’ve done wrong. Because the write-off was recorded in 2019 financial year and reversed in 2020 they appear on separate tax years. And on 2020 financial year, shows as £880 in profit, which is not true.
No it doesn’t. When you originally wrote them off in 2019 that would have reduced your taxable profit for that year by the value of those invoices. When you reverse the bad debt then 8100 will correctly show as income at that point.
But then you said you’re credit noting the same invoices, and if you do that then the reduction in general sales created by the credit notes will balance the “income” of reversing the bad debt so no additional taxable profit overall.
