Hi. My client issued an invoice several months ago without charging GST.
I contacted the customer and they were agreeable to pay the additional amount for GST and asked for an adjustment note to be issued for the GST only.
I created an adjustment note thusly-
Item sold X NEGATIVE Amount GST FREE
Item sold X Positive Amount GST
Please see attached screenshot.
Please can someone tell me why QB now showing this is a credit note and not a debit note to the customer, and more importantly how do I correct? The customer has now paid the GST amount but I cannot settle in Debtors because is showing as negative in Sales
If you wanted to apply GST on the invoice, it is best to edit the invoice to apply the GST code on them instead of creating an adjustment note. The adjustment note is best recorded if an item was returned by a customer and you need to reduce the invoice amount due.
To edit an invoice:
Once done, this should calculate GST on your invoice and then, you can then apply the payment the customer made for the GST to close off the invoice.
If you need help how to cancel or delete the adjustment note, please check this link How to edit or cancel an adjustment note. And to learn more about how to Create and apply adjustment notes or delayed credits in QuickBooks Online.
Drop a comment below if you need more help with QuickBooks Online. I'll be around to help you. Have a nice day!
The original incorrect invoice was 18 months ago, editing the original invoice is not an option as it is a prior (closed) financial year.
Can you advise another method to correct this transaction?
Why does the software (incorrectly) record the transaction as a credit when it is clearly a debit?
Thanks for your reply, Skeksis.
Let me share with you some information when can we create an adjustment note in QuickBooks Online.
For GST only transaction, you can create an invoice and enter the items with positive and negative amount and one of it has a GST and the other is GST-free or Out of scope (similar entry as the adjustment note you've created above).
I would recommend to consult an accountant on how you can record best the adjustment note for GST only in QuickBooks Online. Doing so, your sales and/or tax reports are recorded correctly.
Let us know if you need further assistance. Have a nice day!