I raised an invoice in the last tax year. That period is now locked for the end of year return.
However, I made an error on the invoice, and need to change the amount. I’ve created a copy of the original invoice, with the new (lower) amount and sent to client, but I’m stuck with the old one. I can’t delete it as it’s from a locked accounting period. I can’t put a credit on it, as I haven’t actually been paid and it will show as income I haven’t actually got. How can I write it off?
Hello @MagicWords
I can’t put a credit on it, as I haven’t actually been paid and it will show as income I haven’t actually got.
You would credit off the invoice to reverse the affects of it.
e.g. A £100 debit and a £100 credit to 4000 ( General Sales) - Net affect = £0.00
How can I write it off?
When you write off an invoice all you are doing is posting a credit to 8100 (Bad Debt Write Off)
Oh thank you for getting back to me so quickly.
It’s not a bad debt, though - they don’t owe me that money at all. And if I say it’s been paid, wouldn’t I be liable to pay the tax etc. on it, even though I haven’t actually received any money?
Hello @MagicWords
The bad debt was just an example of how a write off works.
In your case, this is what should be processed.
If you raise an invoice for £150 (4000 General Sales) and it should have been £100
Raise a credit note for £150 (4000 General Sales) to reverse it
Post a new invoice for £100 and they pay it (when its paid)
The effect on your bank = £100 (when its paid)
The effect on 4000 General Sales £150 - £150 + £100 = £100
The effect on Vat Return £150 - £150 + £100 = £100
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