Reversing invoice

[Maf. King]

On Wednesday 06 Jun 2007, Blair Lowe wrote:

> > At this time, unfortunately no.  The 'best' way to do it would be to
> > "process payment" to credit the amount returned.  Then after the
> > transaction is made you can redirect the transaction to the appropriate
> > "income" or "equity" account as necessary.
> >
> > > Thanks in Advance,
> > > Blair.
>
> Good idea, except then Revenue Canada sees this as revenue, and charges
> us the GST (tax) on it.
>
> We need to completely remove it from accountsreceivable. Perhaps we will
> have to do this directly with a journal type entry (yuk).
>
> This sort of thing happens every month as a person decides not to renew
> their domain name for whatever the reason.
>

Hi,

Just to chip in with £0.02 - couldn't you create an "income" account, call it 
something like income:cancelled_invoices so that this regular occurance can 
be easily totalled, and taken off your tax bills, as an expense.  (you may 
need a matching expense account, to make things hit zero? - would need to 
play a bit to figure that out)

You said in your original post that you didn't want to touch items from 
previous fiscal year - yet here you say you need to completely remove an item 
from A/R - that seems a contradiction to me?

Possibly the simple way is that you could unpost/edit/repost the invoice so 
that the "income" is zero, but the invoice still exists?


Cheers
Maf.