Reversing invoice

[Cam Ellison]

Maf. King wrote:
> 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?

That could work.  You could also treat such things as Bad Debts, and 
that will allow you to deduct the GST.  I do this, not that my clients 
are in the habit of running away.

Cheers

Cam


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Cam Ellison, Ph.D. R.Psych. #1417

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