Payment received for invoices dated over 2 years ago prior to first initial quickfile set up.
Vat has been declared and paid already (accrual) but obviously I can’t add an invoice for this payment and date it prior to the first accounting period in quickfile (will mess up opening balances)
This company doesn’t require a balance sheet but I would like to not leave it in a control account, so what would be the best way to deal with it?
I’m guessing I could create a journal for the amount dated the day payment was received and then reverse it with the payment but I’m unsure of the correct journal entry.
Are these invoices not on QuickFile at all? So there is no opening balance for the client?
I would double check with an accountant to work out the best way to process this so that it doesn’t affect your VAT return, although you may just be able to add an adjustment
Hi Beth thanx for your reply. The payment relates to invoices over 2 years ago prior to quickfile. The business is a self employment with no requirement for a balance sheet so opening balances would not have been entered.
This is really a question of how I record a payment for previous years invoicing.
Vat has been paid already since the business operates in accrual basis.
I am the accountant and understand fully the treatment of the payment re tax and vat. I’m having trouble allocating it using quickfile.
Really want I want to understand is how I can create a journal which will cancel out the payment received from sales and the control account.
I would say the easiest way would be to create an invoices in QuickFile as they do exist, you can then tag the payment to those invoices leaving a £0 balance for the client. You would then just need to make an adjustment on the VAT return so that the invoice isn’t included
If I journal the removal of sales and vat the balancing entry would have to be the bank, and I don’t want that reduced since it wouldn’t show a correct balance.