Awaiting Invoice - Any Way to Show in Accounts?

oompahloompah

Hi everyone
to cut a long story short....we (business) did some work obo a customer, who gave us a budget (invoiced and paid 2008) with the understanding that we would repay them any surplus. I have been hassling them since December to let us know how we can repay their money (I don't want to just send a cheque as it is a large organisation and might not end up with the right person/department) but haven't received any reply yet. Our financial year end was 31st March, so it means we will be required to pay tax on this money unless there is some way I can show it in the accounts as not being ours, but I don't know if there is such a way....
Any help much appreciated.
Thanks

mrposhman

I'm not certain about partnership accounting (can you use provisions) but you should be allowed to "provide" for expenditure in the year it is incurred as most businesses can. I shouldn't think this would be any different in partnerships.

How do you deal with credit payments from customers? Do they enter your P&L on the day they are incurred, irrelevant of when the cash is received or are they entered when the cash is received.

If the former, then you should have no problem, providing for this in last years accounts.

Ste_C

You don't need to do a credit note or anything like that, you don't even need a physical invoice.

You can accrue for the expense. The expense relates to your accounting year ending 31.03.09 but you won't incur until it afterwards.

This would show as a debit on your P&L (reducing profit) and a credit (a liability) on your balance sheet.

oompahloompah

How do you deal with credit payments from customers? Do they enter your P&L on the day they are incurred, irrelevant of when the cash is received or are they entered when the cash is received.


Thanks everyone for replying.

I'm not sure if I understand the question correctly, but I invoice customers on the day the project is completed, then pay this invoice (via the bank codes) on the date we receive payment. Apologies if I've misunderstood.

You can accrue for the expense. The expense relates to your accounting year ending 31.03.09 but you won't incur until it afterwards.

Do I just post the amount through the Accruals nominal code (Sage Line 50)? And how do I deal with this when the invoice eventually arrives? Apologies if I'm being thick here, this is new to me.

Thanks again.

LinasPilibaitisisbatman

You will post an accrual journal

Credit the accruals code and debit the nominal code. When the invoice arrives simply debit the cost to the accrual code.

If you know the actual cost thats fine, if not do it as a reversing journal to reverse 1st April and debit the invoice to the nominal code when it arrives.

I would suggest someone with so little accounting know how should seek someone to do their finances for them.

Bean_Counter

oompahloompah wrote: »

the surplus is almost £4K, I have been hassling them since December for an invoice so we can repay their money but haven't received anything yet.

As it appears that you have quantified the exact amount of the surplus, I believe that posting accruals etc is a waste of time. I also would not be expecting your customer to issue an invoice as they have not supplied any goods or services.

I would issue a credit note to them. This will create a credit balance on your debtors control account, which can be resolved by just writing them a cheque at the time and posting it to that account.

LinasPilibaitisisbatman

Bean_Counter wrote: »

As it appears that you have quantified the exact amount of the surplus, I believe that posting accruals etc is a waste of time. I also would not be expecting your customer to issue an invoice as they have not supplied any goods or services.

I would issue a credit note to them. This will create a credit balance on your debtors control account, which can be resolved by just writing them a cheque at the time and posting it to that account.

If they were subject to an audit or a regulator I suspect they would be less than happy with this sort of system.

cash99

LinasPilibaitisisbatman wrote: »

If they were subject to an audit or a regulator I suspect they would be less than happy with this sort of system.

This is an over charge by a supplier to a customer which should be dealt with by issuing a credit note and making a repayment. This is not a cost to the business the overcharge should not have been recorded as income in the first place.

LinasPilibaitisisbatman wrote:

I would suggest someone with so little accounting know how should seek someone to do their finances for them.

or perhaps advising others on accounting