I have an invoice from a supplier which I have added in the normal way but they have returned a deposit, if I raise a credit I have to apply it to the invoice which messes up the amount I can apply to the invoice and doesn’t bring up the credit!
Can I do this? Or do i just need to raise the invoice for the full amount (returnable deposits are not VATable) and then code the refunded deposit via the tagging?
The deposit has not been tagged yet. I raised the invoice and then raised a credit note. It was for Van hire so the money was taken one day then the deposit returned the next day.
For a simple deposit like this (paid and refunded in a short period), I would tag the payment out as a prepayment, and then refund it. This would avoid creating a credit note and would maintain your bank statement entries.
When you tag the prepayment, select Payment to a supplier >> Hold on account or pay down multiple invoices, enter the supplier name and save it.
Then follow the steps outlined here to refund the transaction:
This will create a new pre-tagged entry, but you can then remove the duplicate untagged entry.