Wiki

Case Status
Register Log In

Wiki

 
Part-Paid Invoices/Jobs
  • RSS Feed

Last modified on 1/4/2014 10:34 PM by User.

Part-Paid Invoices/Jobs

If an Invoice/Job is part paid and the multiple payments are likely to span different VAT Quarters or Financial Year it is advisable to split the Invoice/Job into separate ones as it's difficult to determine how much of the amount paid is VAT. This will ensure the VAT Returns, Profit & Loss , Balance sheet and the Debtors reports are correct.

Example 1:

Invoice Number 14 is for £580 (£400+ VAT @  20%  + £100 @ 0% VAT = £580

The customers pays £100 in the current VAT quarter or financial year - it's difficult to determine if the £100 paid is part of the VAT  or Non-VAT lines.

The solution is to split the invoice into two :-

 - Invoice 14 is amended to a gross amount of £100 (include VAT if applicable)  and marked as paid on the date paid

- A new invoice is created for the remainder £480 and left as unpaid. If this is also subsequently paid in multiple payments across VAT Quarters or Financial years, then it should be split again.

 

Example 2:

For an Invoice of £216 (with £36 VAT included), a part payment of £180 has been made, leaving a balance of £36.  The £36 is included in the £961 Debtors amount below, but  as we don't know which portion has been paid, the full VAT amount of £36 has been included in the VAT Due on Debtors figure.

The solution is to split the Invoice into two

E.g