My business insurance recently renewed. Let’s say it cost £600. Payment was taken prior to renewal (I didn’t realise this would happen).
I then called and successfully got a better price. Let’s call it £400.
So I have two bank entries from the insurance Co. £600 and a refund of £200.
I think I’ve messed up the accounting for this - I registered a Purchase for the Nett amount - £400. I then allocated both the payment - £600 and the refund - £200 - to the purchase. Thinking it should net out and all would be well
But I seem to have messed it up. QF shows £200 payment as made but not allocated I guess this is because it won’t allocate £600 to a £400 invoice.
Any guidance as to the correct way to treat this would be much appreciated.
Hi @greeiig
Firstly, view the payment details for the £200 unallocated amount; if you’re unsure of how to do this, click on the £200 “Prepayment” on the client’s dashboard.
When you’re viewing the details, you’ll see a “Refund Balance” button at the top of the page. Click this, and fill out the details. This will then create a pre-tagged bank entry for you.
If you already have a refund bank entry, you can simply delete this as it would be a duplicate.
Hope that helps (and makes sense)
Thanks - that kind of makes sense. So I can’t just allocate the actual bank entry? Problem is it’s locked since I’ve done a VAT return (yes I probably shouldn’t have done that - but no VAT involved so I’d thought it wouldn’t matter)
The original bank entry was logged as a credit note and allocated to the same invoice. I would have thorught that would zero it out? but hasn’t done that.
You can tag bank entries as refunds, but they need to meet a certain criteria (e.g. the invoice has to be on one nominal code only), but they can’t be tagged to a prepayment.
Just to confirm -
- You have a prepayment of £200.00
- You have a credit note of £200.00 which is also tagged as a bank transaction
- The invoice total and balance is correct
I had an invoice for £600 initially, but it was reissued for the new amount of £400. I saved the receipt for £400 and logged a purchase order for £400.
I then tried to allocate both the £600 overpayment and the £200 credit to that invoice so it would net to the correct figure.
However I think that the extra £200 paid against the £400 invlice is not being allocated and showing as a prepayment. Even though I have allocated the credit against that same invoice.
I suspect what happened when you tagged the £200 as a refund is that it will have created a credit note, so the effect now is that you have a paid up invoice for £400, minus a credit note for £200 (essentially as if you’ve only been invoiced for £200), and also a £200 prepayment on account for that supplier.
So the simplest way to get things back into line would be to raise an extra purchase for £200 on the same date as the original £400 one (to counteract the effect of the credit note), and pay that purchase from the £200 prepaid credit (log payment, then tick “apply from credit”).
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That sounds right.
Just tried your solution and it worked. Many thanks!
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