I have 2 clients I have to refund from Dec 2016 (they were included in VAT return, which is now closed). If I refund from the bank the full amount - what are the accounting entries to ensure that the VAT on the refunds is accounted for correctly?
If you issue them credit notes vat will be taken care off automatically.
ok but I have to physically repay them too - what do I do?
As @FaradayKeynes mentions, you would need to create a credit note on QuickFile (we have a guide on this). This will allow you to specify the VAT rates there - which by default matches the original invoice.
When you save the credit note, if the invoice has been paid (like it has in your case), you will be prompted to confirm what happens next - whether you want it to create a bank transaction for you, or whether it should hold the funds against the client for you. Seems you’re actually paying them back, select your bank account and it will record the transaction, which should then hopefully match your bank statements.
The alternative way to do this is to wait for it to show up on your bank statement or online banking, and use the bank tagging feature to tag it as a refund from a client. It has the same overall effect.
Hope that helps
Go to the invoice to be refunded, clcik on more option, create credit note, once done with amount, click save and system will ask you option of actually paying from bank or credit balance on customer, pick the bank you want to pay from and save. That will record refund on your accounting system, now you can actually send money to your customer via online banking or Cheque etc
Thank you. And the VAT updates as a refund amount for the next VAT return?
Thank you. I’ll go ahead and process this way