We have received a cheque fromm a customer and cleared it in our bank feed in thee normal way. In between the cheque clearing we submitted our vat return. Subsequently the cheque bounced. We cannot detag the transaction. Please help
Hi @johnny3
I’m assuming you’re on the VAT cash accounting scheme as you mention the cheque value has been submitted rather than the invoice value in your return?
As you’ve already accounted for the cheque by tagging it to the invoice, in this case you would need to raise a credit note for the invoice and show this as refunded. You may wish to credit a ‘Cheque Holding Account’ for this to help keep track of it, and future cheques.
As the invoice will then show as fully credited, when a payment has been completed on the invoice, copy the original invoice to create a new one (which would now show as either ‘DRAFT’ or ‘SENT’), and tag the successful payment to this invoice. It’s also worth adding a note to this invoice, either as a note or a comment line on the invoice, stating the situation (e.g. “Successful payment of invoice #0001 on which the cheque bounced”).
Hope that helps.
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