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Mani18
November 7, 2019
Question

How to deal with monthly Standing order payments to suppliers?

  • November 7, 2019
  • 1 reply
  • 0 views

Dear All,

Let me paint the picture. I am VAT registered and uses the VAT cash accounting scheme. Lets assume I am the QBO user and I have been making monthly standing order payments from the business bank account to a supplier based on an agreed fee quote for book keeping & accountancy services in advance. I have now made several payments from the business bank account. However the supplier has only invoiced me for some of the services and so far I have raised these bills. But I am struggling to match the monthly payments to the bills as the amounts are unequal to the monthly standing order payments (even though at the end of the year total payments will equal to the bills to be raised later on). Because I am VAT registered I would want to claim the input VAT on the payment as I go along. An example would be say a monthly standing order payment of £180 but the bill I have raised is just for £75 for payroll services. In a situation like this when I login and is in the Banking Tab under the "for review section" and I see the payment of £180, what should I do? I can't match the payment to the bill and even if I select other bills the amount still don't match up to the payment made of say £180. This is because for most time of the year I only get the bills for accountancy services later (meaning that I would have made payments in advance of receiving the service). Can anyone suggest a simple solution to this?

1 reply

paul72
paul72
November 21, 2019

Hi Mani18.

 

I think I get the gist of what you're trying to do - should be relatively straightforward but, if I'm right, you're using Bank Feeds / or Bank Import to bring these payments into QB?

 

Bank Feeds is probably confusing the situation - personally I don't / won't use it (except maybe for reconciling accounts).  It can only match transactions in/out of the bank account - it cannot match amounts in/out of Creditors/Debtors accounts, which in effect is what I think you're trying to do.

 

Anyway ... enter each Standing Order manually - New>Suppliers>Cheque

Cheque Number = Standing Order or BACS or SO (something that you'll recognise, non-numerical otherwise QB will add 1 next time & it will get confused with actual paper cheque numbers).

 

For Accrual VAT accounting (non-cash basis) I would enter the payment into Accounts Payable (Creditors) with NoVat code.

This would create a credit in the supplier's register which you use to pay the invoice once it's been entered into QB.

You can pay each bill after it's been entered by using the required amount of credit.  At the end of the year, the supplier register should be zeroed.

 

For Cash VAT accounting - you probably know better than me.

Enter into Accounts Payable (Creditors) with 20% VAT code but use NoVAT when entering the invoices?

This creates the same credit to the supplier's register but claims the VAT at payment date rather than invoice date.

 

Now when/if you use Bank Feeds to reconcile, the system has amounts in the bank register that it can match to.

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