Note: Before issuing a refund, you should first create a credit note for the customer.
To pay a customer refund, click menu Daybooks > Cash Book > Payments > Sales Ledger.
The Post Sales Ledger Payment Form is displayed.
Type the code for the customer being refunded.
Once you’ve entered all the details, click OK to record the refund.
See more details in Process Customer Refunds in the Cash Book section.
Note: To create a credit note, see Credit a Customer Account.
Allocating a credit note to an invoice is a particular example of matching Sales Ledger transactions.
Click menu > Daybooks > Cash Book > Match SL Transactions.
The Match Sales Ledger Transactions Form is displayed.
Select the code for the relevant customer.
Once you’ve entered all the details, click OK to record the allocation.
See more details in Match Sales or Purchase Ledger Transactions in the Cash Book section.
To print a customer statement, click menu Ledgers > Sales > Reports > Statements.
From here you can print a statement for a single Customer, a range or all Customers.
Within View > Parameters > Sales you can edit messages relating to overdue accounts which are automatically added depending on the age of the debt. You can change these messages as often as you like.
You may wish to add other messages occasionally – special offers, advising of shutdowns etc. These can be added through the stationery layout – File Menu > stationery design > sales ledger and daybooks > statements – this will allow you to add images as well as text.
If you do not wish all customers to receive the messages use the stationery tabs in the customer maintenance and create a conditional ‘Print when’ in the stationery design.
Many businesses offer customers a discount if they pay their invoices early.
Prior to 1st April 2015 when you offered a prompt payment discount you should have charged V.A.T. only on the discounted amount, even if the customer didn’t take advantage of the prompt payment discount offer. However on 1st April 2015 HMRC changed the rules and VAT is now payable on the amount received.
The invoicing part hasn’t changed and is shown here: Add the overall prompt payment discount percentage and period in days to the summary of your invoice like this:
You may need to update your stationery design to include the discount and period in your invoice footer – see Design Your Stationery.
Customer Receipt
When the customer pays you need to check whether he has paid the discounted amount within the time allowed. If he has then simply record the receipt as is and allocate the receipt as normal.
If the receipt is outside the terms you need to decide whether to request the difference – by invoice – discount + VAT.
If the customer has paid the full amount as he was late in paying you will need to split the payment – match the amount paid to the customer’s account and post the difference as a VAT inclusive nominal receipt extracting the VAT and posting the balance to the appropriate sales account.
This process applies to supplier invoices too. When invoices are received post them at full value. When paying, deduct the discount and post to the discount account. That discount will include VAT. Each month determine the amount of discount for the month and transfer the VAT element to the VAT account – It’s probably best to create a dummy purchase ledger account.
Payment: Dr. Supplier Acccount – Full amount Cr. Dummy P/L Discount Cr. Cash Book Net Amount paid.
Monthly: Dr. Dummy P/L Discount account with full amount by credit note( splitting out VAT element) Cr. Discount Received acccount – Net and Cr. VAT account.
Please make yourself aware of the HMRC rules relating to how soon you can write off a bad debt.
Write off a bad debt by producing an internal credit note for the amount being written off. See Credit a Customer Account.
The V.A.T. analysis must be the same as the invoice(s) being written off – i.e. use the same V.A.T. codes (and rates) and net amounts. Use the Daybooks > Sales> Credit a Produced Invoice facility to be sure you are reversing the VAT correctly. You can change the nominal code to bad debt write off or provision account before posting.
Consider whether the amount is a bad debt or uncollectable for some other reason – i.e. the goods never arrived – in which case no sale was made – in this sort of case you can immediately credit the sales account and VAT and send the credit to the customer.
Otherwise, at the appropriate time, charge the net amount to bad debt expense account and debit the VAT account.
Allocate the credit note against the invoice(s).
Quite a lot of businesses have customers who are also suppliers – It is not uncommon for a supplier who is owed more by the customer than he owes to agree to a contra so that the customer pays only the net value and the supplier does not need to make a payment. The reverse situation also applies.
There are two ways of dealing with this scenario –
You may need to agree with the other party which invoices have been settled before posting the contra.
Where no payment has been made but a contra is necessary – e.g in the scenario above both options are still available as the postings through the cash book come back to Nil. Alternatively just raise a journal to both sales and purchase ledgers.
Usually to create a new supplier account or edit an existing supplier’s account details, click menu Ledgers > Purchase > Account Maintenance.
Alternatively, click the Purchase Ledger Account Maintenance button on the toolbar.
It is a good idea to have a fixed structure for your supplier codes to help you identify and group them.
Sometimes you may be in the process of posting invoices and do not have an existing supplier – You can continue to process the invoice – just identify from the drop down list the next account number you can use, enter it and you will be asked if you wish to create a brief version of the account – enough to continue with the invoice. Make a note of the account number and later go to the account – see above , and complete the rest of the details. See the following images for how it’sdone.
If you wish to use the register open Menu > View > Parameters ? Purchase > General Page check ‘Use Invoice Register‘
To record a supplier invoice, click menu Daybooks > Purchase Daybook > Post Invoices.
Alternatively, click the Post Purchase Invoices button on the toolbar.
The Purchase Daybook Post Invoice Form is displayed.
Select the supplier whose invoice you want to post and enter the invoice details.
Once you’ve entered all the invoice details, click OK to record it.
The details of the postings are now available on Ledgers > Purchase > Invoice register. Once an invoice has been authorised you need to update the ledger from this sub menu.
Note: A cash purchase doesn’t normally involve a supplier invoice (there may be a Cash Sale Invoice) and often reimbursement is made from petty cash.
If you want to record a supplier invoice or your supplier allows you to delay payment, you should Record an Invoice.
You can either record the expense immediately – click menu Daybooks > Cash Book > Payments > Petty Cash.
The Petty Cash Payment Form is displayed.
Enter the cash expense details which will be credited automatically to the Petty Cash Control Account.
OR you can post all the period’s payments as part of the period end routine and balance the petty cash tin at the same time.
See more details in Process Petty Cash Payments in the Cash Book section.
Note: Small value receipts don’t always show the VAT separately (Amount is VAT inclusive). You can claim back the VAT element providing the document shows a valid VAT number and is dated.
Note: You should normally receive a credit note from a supplier before receiving a refund unless there has been an over-payment
To record a Supplier refund, click menu Daybooks > Cash Book > Receipts > Purchase Ledger.
The Post Purchase Ledger Receipt Form is displayed.
Select the code for the supplier giving the refund.
Enter the amount and allocate it against the credit note you received or the payment which caused the over-payment.