Skip to main content
K
Knockalong
February 14, 2021
Question

Mistakenly created invoices with GST

  • February 14, 2021
  • 1 reply
  • 0 views

I mistakenly created invoices with the account set up as "registered for GST".

 

Gratefully, my accountant has made changes to my account to "Not registered for GST", and adjusted my invoices accordingly. These invoices were originally created in the 2019-2020 financial year.

Now I need to pay my customers the GST they are owed and register that change.

I have been advised;  "You can refund in cash however this will require a journal entry if you
refund the GST to the client through your bank account you would then code
those amounts to Accounts Receivable therefore no need for a journal entry."

 

So as not to create further incorrect entries, could you please advise me in detail, the best step by step method of carrying out this action?

1 reply

Rebecca R
Rebecca R
February 15, 2021

Hello Knockalong,

 

Welcome to the QuickBooks Community. It's normal to make mistakes or record entries incorrectly when learning the best bookkeeping methods for your business. Generally there are easy ways to correct these mistakes, and it seems like your accountant has helped you out along the way. I can give you a hand with how to record a refund in QuickBooks Online but checking in with your accountant again to ensure that this is the method they'd like you to use would be best practice.

 

Please follow these steps to record a Refund using QuickBooks Online:

 

  1. Navigate to the + New button.
  2. Choose Refund receipt beneath Customers. 
  3. Select the customer you'd like to refund from the Customer dropdown.
  4. Choose the Payment method and Rerfund From account. It seems as though your accountant would advise you to use your bank account so as to avoid recording an additional journal entry. 
  5. Enter the appropriate detail for the refund, such as Amount and whatever else is necessary. Your accountant should advise you on which Sales tax code to select since you're refunding for GST. 
  6. Hit Save and close or Save and new to save the changes to the refund and close the transaction or enter another. 

 

As long as you've kept track of the customers requiring refunds and the amounts, this should be fairly straightforward, although tedious work if there's a lot to enter. As I suggested, consulting your accountant on this plan is a good idea so that they can give you the go-ahead that this method will work for your business' needs.

 

Don't hesitate to drop another line here in the Community if you have any future QuickBooks-related questions to ask. I'm here to help. Take care!

Terms & ConditionsAccessibility statement