Incorrect invoices - how to rectify

[HelenTheShop]

Hello all
For the whole of 2019 I been incorrectly including card prepayments as a sale - taken off our epos system. I have now discovered they should have been treated in the same way as a voucher that can be used to spend on a choice of items that attract different rates of VAT ie not counted as a sale. I have been creating a monthly invoice taken off epos for all our sales. To pay these invoices (via Quickfile) we have been transferring all our bank credits into a cash account set up in Quickfile and paying the invoices from there. Both the payment and the invoices themselves have all been locked as our VAT returns have been sent during the year. I know how to deal with amending the VAT return but I don’t know how to deal with the invoices in Quickfile. We are currently showing a far higher sales figure than we should be which means our profit is far greater than it should be. Any help would be greatly appreciated.
Regards
Helen

[SXGuy]

Easiest way, would be to create a journal, debit sales nominal, credit whichever purchase nominal it should go under.

[ian_roberts]

How are you intending to make the adjustment to HMRC? Do you want to adjust it in the next VAT return or are you telling them about it separately without adjusting the return?

If you’re doing it by way of an adjustment to the VAT return then the simplest way to account for it in QuickFile would be to just do one big ad-hoc credit note (a sales invoice with a negative amount) for the appropriate net and VAT amounts, and refund that from the customer cards holding account assuming you’re dealing with it from now on in the way I described on your previous post. This credit note should then be picked up automatically the next time you do a VAT return and you won’t need to make any manual adjustment.

If you’re telling HMRC separately with a VAT652 and not adjusting your next return then you’re probably better off making the change with a journal (journals don’t affect the QuickFile VAT return process) - debit general sales for the net, debit VAT liability for the overpaid VAT, and credit the holding account for the balance. If they repay you the VAT then you’d tag that to VAT liability in the normal way, or if they just offset it against your next return then it should balance up automatically.