We have just set up QBO. Originally I entered customer balance as an opening balance, but that was showing as sales in our profit & loss, which have already been recorded in our old system. So on the advice of my accountant I have done journal entries for the accounts payable by our customers, but I cannot get the VAT to record correctly and the amount owed by the customer is showing as the net amount of 2644.78 instead of the gross amount of 3173.74. What am i doing wrong?
I seem to have a blank reply here, but on doing some more digging, I think I am asking the wrong question, but still need some help! Also I think I posted twice in error..
I initially imported all my customer opening balances, but they were reporting as sales and that didn't look correct as I have already accounted for the sales in our previous software. That's when my accountant suggested the above journal & the VAT messed up.
However, on reflection, I think the right thing to do is import the customer outstanding balances as opening balances, but how do I import them so they don't report as sales and get double counted?
Hello again, mattymoo. Thanks for getting back and providing detailed information about the help you need.
If you're creating a Journal entry, you'll need to put the VAT in the paired account with Accounts Receivable (A/R).
As for the Customer's Balance, A/R is the impacted account which appears in the Debit column of the transaction journal. It means that the customer still owes you money and will stay in A/R until the invoice is paid. However, if you'd not want the sales account, then you can use a different account and put a VAT code in that line item.
Moreover, since every business has a different structure, and it typically goes to the posting accounts used for transactions. For this reason, I still recommend reaching out to your accountant to help determine the different account you'll use.
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