Claiming VAT

pricey42 · ‎February 09, 2023

Hi, I have an invoice from a debt collection agency and not sure how to put on quick books so I can claim the VAT back.

The issue is that the company put the amount they are charging on the invoice but deduct it from the money they have recovered and so the amount due is zero.

I have tried putting it on as VAT only but it doesn't balance or tries to put the VAT on as amount due and then shows that we owe the VAT to the company which we don't.

Can I enter it as a journal?

Any help would be appreciated as its driving me crazy!

paul72 · ‎February 09, 2023

Hi @pricey42

Just to get the situation clear:

Debtor owes you money
You have passed the debt to an agency to collect
Agency has collected some/all of the debt, deducted their charges & sent you the remainder

Correct?

You will need to Contra the payment received against the balance owing from customer & the bill from the agency.

There is a help article on here about Contra Payments via Journal but I have a dummy Bank Account in QB (=Contra) for the purpose.

Enter the Bill from the agency at full value inc. VAT.

Receive two payments from the Debtor...

(1) amount equal to the agency bill - in to the dummy Contra account
(2) amount actually received - in to normal Bank account in QB

Pay the agency Bill from the dummy Contra account (enter as a Cheque in QB).

(Contra account balance will now be £zero again)

If there is still a balance owing from the Debtor, you can write this off with a Bad Debt journal.

Hope this helps.

View solution in original post

paul72 · ‎February 09, 2023

Hi @pricey42

Just to get the situation clear:

Debtor owes you money
You have passed the debt to an agency to collect
Agency has collected some/all of the debt, deducted their charges & sent you the remainder

Correct?

You will need to Contra the payment received against the balance owing from customer & the bill from the agency.

There is a help article on here about Contra Payments via Journal but I have a dummy Bank Account in QB (=Contra) for the purpose.

Enter the Bill from the agency at full value inc. VAT.

Receive two payments from the Debtor...

(1) amount equal to the agency bill - in to the dummy Contra account
(2) amount actually received - in to normal Bank account in QB

Pay the agency Bill from the dummy Contra account (enter as a Cheque in QB).

(Contra account balance will now be £zero again)

If there is still a balance owing from the Debtor, you can write this off with a Bad Debt journal.

Hope this helps.

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