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Level 1

How does one record payments on account from customers for a cash accounting client to record the VAT and reflect this in their customers accounts receivable account?

 
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Moderator

How does one record payments on account from customers for a cash accounting client to record the VAT and reflect this in their customers accounts receivable account?

Welcome to the Community, @katieabbott888.

 

I can provide some information about recording the payments.

 

In QuickBooks Online, there are two ways to record payments received from customers. You can either use Invoice and Receive Payment for deferred transactions or Sales Receipts for immediate payment.

 

For cash payment, you can use the Sales receipt option to record your sales. During the process, you have the option to add VAT on your items if inclusive of tax (see sample screenshots below).

 

Additionally, here are some helpful references that you can check out about entering transactions, as well as setting up VAT:

 

Let me know in the comment section below if you have any other questions. Have a great day ahead.

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Level 1

How does one record payments on account from customers for a cash accounting client to record the VAT and reflect this in their customers accounts receivable account?

Thanks for the help, the issue comes that I would like to reflect a credit on my customer account, and raising a sales receipt does not do this as it effectively creates an invoice and a receipt and posting a deposit on the account I cannot allocate VAT when posting to Debtors or Creditors?

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QuickBooks Team

How does one record payments on account from customers for a cash accounting client to record the VAT and reflect this in their customers accounts receivable account?

There are other ways of posting a credit to your customer's account, katieabbott888.

 

You can either create a journal entry or a credit note. Both of these options have a VAT column where you can add an amount to it. You can also create a supplier credit to post a credit on a creditor's account. 

 

Follow the steps provided in these articles on how to record them: 

 

Let me know if you need anything else.

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Level 1

How does one record payments on account from customers for a cash accounting client to record the VAT and reflect this in their customers accounts receivable account?

Hi, thanks for the response with this,

 

The problem comes when this is a receipt from a customer on the bank feed, it would mean replacing all these receipts on the bank feed and making manual journals in their place which defeats the object of the bank feed, this is also the same with using a credit note to create the credit, the receipt on the bank feed has to be replaced - it seems off this fundamental transaction cant be reflected?

 

A payment on account to a supplier can be recorded in this way by recording a cheque and VAT is then allocated on the bank screen, creating a debit balance in the supplier code - however this is not so for a customer receipt

 

 

Highlighted
QuickBooks Team

How does one record payments on account from customers for a cash accounting client to record the VAT and reflect this in their customers accounts receivable account?

Thanks for the clarification, @katieabbott888.

 

Let me share some information about creating Journal Entry (JE) in QuickBooks Online (QBO). JE is used as a last resort in recording transactions and to offset some amounts. This will not replace the purpose of the receipt in the banking feed. This is to match the credit or receipt in your bank feeds.

 

Here's how to create a JE in your QBO account: 

  1. Go + New button.
  2. Select Journal Entry.
  3. Fill out the fields to create your journal entry.
  4. Click Save and new or Save and close when done.

You can also use this article for additional reference in creating a JE: Create a journal entry in QuickBooks Online

 

I suggest getting in touch with your accountant for assistance in choosing the right account. Doing so, will ensure the correctness of your book after recording this.

 

Also, I got you this article that can guide you in reconciling your accounts accurately: Reconcile an account in QuickBooks Online.

 

Know that you're always welcome to post here anytime you need help with your QBO account. I'll be here to assist you. Have a wonderful day and always keep safe!