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Level 1

Bank receipt from a customer in advance

Our clients pay by standing order each month and then we raise and invoice once a year that then offsets with these payments.


However we operate our VAT returns on a cash accounting basis.


How do I record the bank receipt to go to the customer account so that is shows how much they have paid in advance but also so that the VAT element of the payment received goes on our VAT return?


If I do a deposit and put to the customer, the customer account is right but it's not picking up on the VAT return.


If I do a receive payment, same thing, not picking up on the VAT return.


Quickbooks support suggested do a manual journal - this gets the VAT on the return but the customer account is net of the VAT rather than the gross.

I could manually adjust the return for the VAT on the payments on account, but then once the invoice is raised and allocated to the payments, Quickbooks then accounts for the VAT then and would have to manually take it back out at that point which has a high risk of missing something.


Quickbooks support also suggested a dummy invoice - but then my customer balance would be wrong and we wouldn't know how much they have paid in advance.


Any ideas?

QuickBooks Team

Bank receipt from a customer in advance

Hello EmmaWallace, thanks for posting on the Community page, we would advise that you reach out and speak to an accountant who will be able to advise the best way t record this in your account so it shows what you need it to show correctly. We are just technical support here and not trained accountants.

Level 1

Bank receipt from a customer in advance

I am an accountant. This is for our Accountant profile not a client. I know how and what it should be showing but I can't get Quickbooks to do it.


Sage allows you to post an advance payment to a customer account (debtor) and if it is set up as cash accounting, asks you what rate of VAT should be applied to it for the VAT return. It seems there is no such solution in Quickbooks which is a fundamental flaw and means that VAT is not being declared correctly on the VAT return.

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