Reversing a payment from sale to grant

[ggtony]

Our business has conducted a project with support from Innovate UK. A claim was submitted and payment received. Incorrectly, I issued an invoice as part of the claim and tagged the bank receipt as payment against this invoice.

I now realise no invoice should have been created because it is classed as a grant, not a sale. So I have issued a credit n ote, but not refunded, because the money was correct. I told Quickfile to hold the payment on account (which seemed the most suitable option). However, I can’t now resolve the tagging of the payment in the bank records. I can neither detag it nor delete it.

How should I clear the bank payment and then re allocate it as payment of a grant rather than invoice?

[QFSteve]

Hello @ggtony

The best option would be to refund the prepayment on account (to reverse the original payment value on the bank).

You can then create a new bank transaction and tag it as required.

[ggtony]

Thanks Steve - I believe I did the first part - refunded to prepayment in account - and have now created a new bank transaction (and a new nominal account to record it in), and have tagged this successfully. However, I cannot remove the original tagged payment:

If I try to delete it, it says I must detag it, but if I try to detag it, it says ‘Payments associated with refunds cannot be deleted.’

Any thoughts on how to move forward from here? I now have the receipt of the money appearing twice in the bank report, even though the invoice has been refunded (Held on account for use against future invoices).

[QFSteve]

Hello @ggtony

I cannot remove the original tagged payment:

You do not have to.
Once you refund from the prepayment on account it reverses the affect on the bank.

Example In your bank

Payment £100
Refund -£100
Payment £100

Net effect it £100 payment.

[ggtony]

Aha that’s great to hear - thanks for the help!