How do I record a lost deposit?

I agreed to purchase a bespoke website, a price was agreed and I paid half the cost with the balance to be paid on completion of the website. The company had received some bad publicity so I asked for the order to be cancelled and my deposit refunded. Eventually the company agreed to repay the deposit but then applied at Companies House to be struck off, I know I will not get any of the money I paid back.

How do I cancel the purchase invoice and write off the amount already paid to the supplier?

No need to cancel the invoice, if invoice was of say 100 and you paid 50 in advance then this 50 is your expense and balance you can go to suppliers invoice and create credit note to make outstanding balance nil

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