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Pyn's avatar
Pyn
4 years ago

Correcting Past Invoices

We recently discovered that an invoice from 7 years back was recorded $0.50 less than the invoice amount but full invoice amout was paid at that time (becasue of direct debiting). Since it is not adv...
  • Steven_M's avatar
    Steven_M
    4 years ago

    Hi Pyn 

     

    It is probably something that you want to have a discussion about with your accounting advisor in regards to the best way to handle that situation going forward. Generally speaking, as that transaction is dated so long ago you would not be able to make changes to it to clear that balance so you would not be able to update the purchase and probably have to deal with it in the current financial year.

     

    Personally, the way I would deal with it as it's such a long amount is to generate a debit note for that supplier (enter a negative purchase). Once that has been generated, apply that to the purchase to close it off. 

     

    An alternative way would be to record a payment on that account with a holding bank account being used rather than a bank account this would close that purchase. You could then record a journal entry to another account to clear that holding account if necessary.

Steven_M's avatar
Steven_M
Former Staff

Hi Pyn 

 

It is probably something that you want to have a discussion about with your accounting advisor in regards to the best way to handle that situation going forward. Generally speaking, as that transaction is dated so long ago you would not be able to make changes to it to clear that balance so you would not be able to update the purchase and probably have to deal with it in the current financial year.

 

Personally, the way I would deal with it as it's such a long amount is to generate a debit note for that supplier (enter a negative purchase). Once that has been generated, apply that to the purchase to close it off. 

 

An alternative way would be to record a payment on that account with a holding bank account being used rather than a bank account this would close that purchase. You could then record a journal entry to another account to clear that holding account if necessary.

Pyn's avatar
Pyn
4 years ago

Right, I was thinking to somehow record a journal entry and assign the trade creditor to this particular supplier but it seems like recording a debit note would be more easier in this case. Thank you  Steven. 

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