Hi there,
I’m wondering if anyone can help me, I’m in a right pickle with how to resolve a situation.
To cut a (very long!) story short. We have a customer who had a purchase in our system, they took a direct debit against it which was a partial payment for it. Turns out they had actually issued a credit note against it (which got stuck in spam filters so it was missed) and actually it was a full payment plus would have cleared two other invoices.
In the meantime the VAT return got locked. It’s now been months of me trying to figure out how to sort this mess out, trying to clear it from credit, which won’t match up etc. Accountant says I can’t unlock the VAT return, then said I could and the system says I’m not allowed to because it was electronically submitted.
How on earth do you fix something like this. I’m not particularly advanced and I’m just getting into such a state - can’t get bank statements to match at any point and it’s throwing everything out. Have no idea how to ever get things matching again.
Anybody know how to help me?
Thank you so much,
Tori
So, just to clarify the situation to make sure I’m understanding it correctly - is this for a sales invoice or a purchase invoice? That is - are they your client, or your supplier?
Original purchase was for £2508.32 (21st Oct)
Then issued another purchase for £501.37 (no invoice sent until after VAT return locked)
Then issued a credit note against the first invoice for £1173.43 (23rd Oct)
The issued another purchase invoice for £386.48
Took direct debit on 11th Nov of £2222.74
We always have massive problems with this supplier as they either don’t send invoices, they get stuck in spam etc so always have to wait till direct debit comes out to see what goes out, it’s a disaster. But this is the worst situation to date.
It all does add up on paper, but absolute mess in QF because I put the payment all against the first invoice which should have had the credit note against it.
and two more purchases of £501.37 and £386.48, both unpaid
If you go to the payment (e.g. get to the preview screen for the £2508.32 purchase, then follow the link at the top saying there’s a payment attributed to this purchase), are you able to “detach” the payment from the invoice or is that locked down by the VAT return?
If you can detach the payment then it should be possible to go back to the (now unpaid) £2503 purchase and do more options → credit note to create the £1173.43 credit and reduce the outstanding balance of that purchase. Then you can go to each of the three unpaid purchases in turn and “log payment” → “apply from credit” to mark them all as paid by the original DD payment.
No, it’s all locked. Can’t alter anything to do with the purchase.
And then I tried to put the credit against it from credit note this morning as a last resort, which cleared the first one but didn’t leave any credit on the supplier’s account and won’t let me clear the other two.
If the invoice was paid, and the paid part of the invoice was credited, you should be given an option to either refund the amount or hold on supplier account.
Am I right in thinking that the credit note of £1173.43 was to cancel the outstanding balance of £285.58, plus a partial refund of what has been paid? And then this was held by the supplier for future purchases?
Strange, I’m able to freely detach payments from purchases that are locked by a VAT return - I can’t modify the purchase itself but I can detach the payment.
I am on accrual accounting for VAT though, it might be different if you’re on cash accounting. Accrual accounting locks the purchases but not the payments, and cash accounting locks the payments but not the purchases - if both the purchase and the payment are locked then it may be something other than a VAT return that has caused the lock (e.g. if you’ve run a year end since then).
Looking at the dates it seems more likely that the credit was to partially cancel the original purchase, and then the subsequent DD payment cleared the remaining balance on that first purchase plus the whole of the other two.
Yep, the original purchase was partially credited back, then two more purchases issued and then a direct debit taken to clear the lot.
Maybe I’m looking at the wrong screen then? If I go into the purchase and near the top I have a green arrow and it says " Click here to view all payments attributed to this receipt" in blue. If I click on that I can see the payments but it says I can’t delete it because it’s part of a locked VAT return. Also, I can’t see the credit payments listed there at all. Am I looking on the wrong screen maybe? If I could delete the payments that’d solve all problems. Maybe I’ll try that from the bank page. No idea where the payment from credit has gone mind you because we couldn’t allocate the credit note to that specific invoice (again because it was locked so that was just put on the supplier’s account which was also causing problems)…
I went into the bank bit and it looked like I was going to be able to delete it, I’m fact it said deletion confirmed. And then the invoice is still showing as paid in full. And then if I go into the invoice again it still says payment locked. This purchase is actually going to kill me off!
You say payments (plural) - the “detach” button I’m talking about is when you click through to a single specific payment via the “view details” link in the right hand column. If there’s only one payment assigned to a purchase it skips the “list of payments” screen and takes you straight to the single payment screen, that’s why it didn’t occur to me to mention that before.
You’re correct that it won’t let you delete a payment entirely when the payment is locked by a VAT return, but it should still let you detach the payment from the purchase (which makes the purchase unpaid or part-paid and makes the payment appear under “prepayments” for that supplier).
Matthew, is it possible our account isn’t functioning quite as it should be or I’ve set something up wrong in that absolutely everything is locked down once a VAT return is submitted and it doesn’t seem to be for other people?
Is there any option for someone to log in to our account and lock at this for us or something?
At this point the only solution I have come up with is rolling back the VAT return and our account won’t even let me do that because it’s saying that it was automatically submitted to HMRC so I just can’t see a way to ever get this resolved
Yes, I just do the bookkeeping. As above, the accountant doesn’t want me to rollback the VAT return.
I’m not a bookkeeper by profession, I just do the admin for the company and this is one of the jobs I’ve been given in the short term and I’m learning. Don’t make me feel any worse for getting myself in a situation I am trying to fix.
Thanks.
I’m not trying to make you feel worse so apology if it came across that way. But how to fix it does depend on whether your using cash accounting or accrual.
