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EmilyZhan
Level 2

What happens if I delete a wrong invoice from last month

Now in Jan 2021, while checking found there is a woring unpaid bill posted in Sep 2020, i wonder what happens if i delete this wrong bill?
Solved
Best answer January 04, 2021

Best Answers
john-pero
Community Champion

What happens if I delete a wrong invoice from last month

Deleting an unpaid bill from 2020 will increase your accrual net income with no effect on cash basis income and, unless you were a very busy beaver and have already filed your 2020 tax return go ahead and delete or void. 

 

If this had been from a closed AND filed period, say, 2019 or 2018, the procedure would be to leave the bill in place but create a current year credit memo reversing it. It is important to not affect filed taxes, although a big enough change in your favor would command an amended return. But then it comes down to whether you report as cash or accrual. Unpaid bills or invoices are disregarded under Cash accounting unyilnpaid

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2 Comments 2
john-pero
Community Champion

What happens if I delete a wrong invoice from last month

Deleting an unpaid bill from 2020 will increase your accrual net income with no effect on cash basis income and, unless you were a very busy beaver and have already filed your 2020 tax return go ahead and delete or void. 

 

If this had been from a closed AND filed period, say, 2019 or 2018, the procedure would be to leave the bill in place but create a current year credit memo reversing it. It is important to not affect filed taxes, although a big enough change in your favor would command an amended return. But then it comes down to whether you report as cash or accrual. Unpaid bills or invoices are disregarded under Cash accounting unyilnpaid

EmilyZhan
Level 2

What happens if I delete a wrong invoice from last month

Thanks so much for your information. Further question:

For the wrong unpaid bill posted in Sep 2020, what's the best way to correct it now, when we have not finalized Dec 20 accounting and filed  2020 tax return.

1. delete it 

2. adjust via journal entry in the general ledger

 

 

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