Hi Team,
Please can you advise on writing off a customer debt associated with a part paid invoice. I have previously used the ‘Mark as Bad Debt’ facility for customer invoices with full balance outstanding, however never I have never used it for part paid.
Does the ‘Mark as Bad Debt’ facility write off the outstanding balance only or the entire invoice balance? (which in this case has been locked down Ref: previous VAT return).
Any advice is much appreciated.
Thank you very much!
Hi @Andy_B
If you write off the balance as a bad debt, it will use only the balance, not the full invoice value.
So, for example, I create an invoice for £500 + £100 VAT (£600 gross). £321.00 was paid, but the remaining £279.00 is a bad debt. When I write this off, the following happens:
| Nominal | Debit | Credit |
|---|---|---|
| 1100 Debtors Control Account | - | 279.00 |
| 2201 Purchase Tax Control Account | 46.50 | - |
| 8100 Bad Debt | 232.50 | - |
Hope that helps!
Hi Mathew,
Thank you very much the response, which I fully understand. The only slight difference we have to the above scenario, is that the ‘bad debts’ were amassed prior to us becoming VAT registered and often are £1.50 remaining against an invoice, all of which just want tidying up in Quick File (Good housekeeping as it were!), does this change your response at all?
I do have another quick question that you might be able to help regarding supplier invoices and VAT if you wouldn’t mind. We are into our 3rd VAT return as a business.
What I have noticed is that once the figures are locked down in QF for a VAT quarter, if you then input a supplier invoice pertaining to that locked down quarter, the VAT is coded (2201) to the invoice date which falls in that locked down quarter. How can that be as the return has been completed?
Does QF somehow now that that VAT hasn’t been paid and when the next return is created, it’s somehow moves that VAT into the next quarter?
So in a real world example, I have just inputted a supplier invoice that arrived here late with a December 2019 date. When I go into the Nominal code 2201 the VAT element of that invoice appears with a December date on, surely, I shouldn’t be able to do this?
Any advice and guidance is very much appreciated.
If you didn’t charge VAT on the invoice, then there would be no VAT part to it, only the control account and bad debt account.
It’s this way because of the very situation you’ve encountered. Where an invoice is input late, it will be included in the next VAT return so it won’t be missed out completely and the VAT will still be accounted for.
The lock isn’t on the period, but rather individual invoices and/or payments (depending if you’re on cash or acrual accounting).
Thank you, I appreciate that!