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gregayres1
October 6, 2023
Question

Reissued invoices with backdated VAT

  • October 6, 2023
  • 1 reply
  • 0 views

Hello!

I've tried searching for this and haven't found anything so apologies in advance if it's already been answered.

I have worked for a courier company on a self-employed basis for around 6 months.  Every week they issue a "self billing" invoice (i.e. they produce it but it's from me to them technically) and pay the according amount into my bank account.

I've now registered for flat rate VAT as from 1/3/23.  The company I work for have a process where you can ask for the invoices I mentioned to be re-issued retrospectively.  This then obviously means that they owe me the VAT for all these invoices which they pay as a lump sum.

My concern is how to reconcile a load of invoices with no VAT paid (and corresponding payments to the bank account), and then one big bank payment which is effectively all VAT.

I'm currently on self-employed and was planning to switch to online for obvious reasons but wanted to check this was possible to resolve in QB online.  I've used Xero in the past and I think it could be sorted with a control account (is that a Xero term?) with invoices manually set up and payments allocated against them.  I'd rather stick with QB if I can though as I find it simpler for what is normally an incredibly simple business.

What doesn't help here is that it is over two tax years which I think scuppers one idea I had of just creating one big invoice for all the payments and then allocating each bank transaction as a partial payment.

Any ideas would be enormously appreciated!

1 reply

E
Ethel_A12
October 6, 2023

Hello there, @gregayres1.

 

I appreciate your effort of trying to look for answers about recording a lumpsum amount of VAT for the past two years in QuickBooks Online.

 

Yes it is good to switch from QuickBooks Self-Employed (QBSE) to QuickBooks Online (QBO) since you can't set up VAT in QBSE.

 

Once done, you have two options to move the invoices.

 

  • You can either manually enter the invoices in QBO with VAT.
  • Move the data by downloading them from QBSE and upload to QBO.

 

If you choose the second option, you can create a Journal Entry to add the VAT.

 

Here's how:

 

  1. Go to + New.
  2. Select Journal entry.
  3. On the first line, select an account from the Account field. Depending on if you need to debit or credit the account, enter the amount in the correct column.
  4. On the next line, select the other account you're moving money to or from. Depending on if you entered a debit or credit on the first line, enter the same amount in the opposite column.
  5. Check the amounts - you should have the same amount in the Credit column on one line and the Debit column on the other. This means the accounts are in balance.
  6. Enter information in the memo section so you know why you made the journal entry.
  7. Click Save and new or Save and close.

 

Moreover, since every business has a different structure, and it typically goes to the posting accounts used for transactions. For this reason, I still recommend reaching out to your accountant to help determine the different account you'll use.

 

For future reference, you can read this article about reconciling in QuickBooks Online: Reconcile an account in QuickBooks Online.

 

Feel free to click the Reply button below if you need further assistance about adding VAT in QuickBooks Online. I'm always here to help. Have a great day.

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