Correcting GST/VAT Errors on Expense Invoices

  • Updated

For those located in the Asia-Pacific region, the term "Trust Account" is commonly used, whereas customers in Europe will refer to this as a "Client Account". For a deeper understanding of regional terminology, please visit our Glossary of Regional Terminology.

This article is aimed at guiding you through the process of correcting an error where tax has been incorrectly charged on an expense invoice. It's essential to maintain accurate financial records, and rectifying these mistakes is paramount. Here are the steps:

Unreconciling the Transaction

Firstly, if the transaction has already been reconciled, it will need to be unreconciled:

  1. Navigate to the Invoice in question.
  2. Select Less Payment, then Reconciled.
  3. Click the Unreconcile button, followed by Unreconcile this transaction. This operation will unreconcile all transactions on the list.

Note: Don't worry about the other transactions; you'll have the opportunity to reconcile them shortly.

Reversing the Payment

Next, reverse the incorrect payment:

  1. Stay on the invoice page, then select Less Payment and click Reverse.
  2. Input a reason for the reversal and confirm the action.

Creating an Accurate Invoice

With the incorrect payment reversed, it's time to create a new invoice with the correct tax:

  1. Go back to the incorrect invoice and click the three-line icon, then select Copy Invoice.
  2. On the new invoice, adjust the incorrectly charged GST/VAT. Make sure the invoice amount remains the same as what was initially paid.
  3. Void the original invoice as it is no longer required.

Processing a Disbursement

Then process the disbursement without executing a real transaction:

  1. Navigate to Client/Trust Accounts and choose Disburse Funds.
  2. Select a Creditor Disbursement profile. Include only the owner and invoice in question.
  3. Download the bank file but do not upload it to your bank. Simply discard it.

[Add a screenshot showing how to adjust a disbursement]

Reconciling the Corrected Transaction

Now, reconcile the transaction once again:

  1. Navigate to Client/Trust Accounts followed by Bank Statements.
  2. Locate the unreconciled transaction and reconcile it.

Generating a Report for the Owner

Last but not least, provide a report to the owner to reflect the corrected transaction:

  1. Within the dashboard, go to Reports, then Client/Trust Accounting.
  2. Click on Owner transactions report to generate a new report.

Important: Previously generated owner statements cannot reflect this change. You'll need to provide the owner with the new report directly.

By following the steps above, you’ve successfully amended an incorrectly applied GST/VAT on an expense invoice. Your financial records should now reflect the accurate figures, and your owner will be informed about the correction.

See these related articles for further assistance:

  • Article 1
  • Article 2

 

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