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Nick-Flint66
April 29, 2020
Question

Voiding or altering an invoice after VAT return has been filed whilst using the FRS

  • April 29, 2020
  • 1 reply
  • 0 views

I have an invoice which needs to be written off as bad debt and another which needs the amount on the invoice adjusted down. I am being told that because I am using the flat rate scheme once the VAT return has been filed then these invoices cannot be changed. This leads to a situation where these invoices will always show as unpaid and overdue and partially paid. This therefore makes my figures in quickbooks wrong and shows I am owed more money than I actually am. I am being told nothing can be done to resolve this and therefore my quickbooks account will always be wrong. So despite being able to resolve this with HMRC directly quickbooks can do nothing about it. I can't believe that this is the case as I am sure at some point or other most businesses will need to write off an invoice or adjust it regardless of which type f accounting 

1 reply

MJoy_D
MJoy_D
April 29, 2020

I can show you how to write off bad debt in QuickBooks Online (QBO), @Nick-Flint66. 

 

After identifying all the invoices or receivables that should be considered as bad debt, you can now proceed and create a bad debts expense account. You can have this account from your Chart of Accounts.  

 

Once done, create a bad debt item from your Products and Services. You can see this option from the Settings (⚙) icon. You can now create a credit note for the bad debt and then apply that to the invoice.

 

Here’s how to create a credit note for the bad debt: 

  1. Go to the + New button and select Credit note or Give credit.
  2. Select the customer from the Customer ▼ drop-down.
  3. In the Product/Service section, select Bad debts.
  4. Enter the amount you want to write off.
  5. In the Message displayed on statement box, enter Bad Debt.
  6. Click Save and Close.

To apply that to the invoice: 

  1. Go to the + New button and select Receive payment.
  2. Add all the information needed.
  3. Select the invoice from the Outstanding Transactions.
  4. From the Credits section, select the credit note.
  5. Select Save and Close.

Check this article for more information: Write off bad debt in QuickBooks Online. 

 

This will show as updated on the current VAT return. Also, here’s more information on how to submit a VAT return in QuickBooks Online.

 

Let me know if there's anything that I can help. I'm always here to assist. Have a wonderful day!

N
Nick-Flint66Author
April 30, 2020

Thanks for your help, I was on with a quickbooks adviser yesterday who assured me there was nothing that could be done to resolve the issue, I'll give it a try. 

Does a credit note effect any of the figures, profit/loss, income/outgoings.

Thanks in advance

Nick

M
MadelynC
April 30, 2020

You’re most welcome, @Nick-Flint66.


The credit note entered as a debit under revenues and credit under accounts receivable. Each credit note should be recorded and updated in the appropriate accounts to match the balance.


Since credit note is a posting transaction that can be applied to a customer's invoice as a payment or reduction, it'll affect the amount on your Profit & Loss report.

 

However, credit notes are a little bit different from the Standard Profit and Loss report, and therefore need to be entered differently. It also depends on the item you selected on your Income account.


You can read this article that has information about customising financial reports that have ways to view all accounts by type: Customise reports in QuickBooks Online.


You can get back to us if you have any other concerns. I’m always right here to help Nick.

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