Bad debts
System
Posts: 100,534 🤖 Admin 🤖
please someone help - my brain's gone to moosh!
client owns a garage. customer got a bill for £300 + VAT, refused to pay it as the car was knackered. Client said he'd keep the car & knock £150 off the bill, but customer never paid the balance, so it needs writing off.
Client took out some parts from the car to use & scrapped the rest.
I'm entering a credit note to clear this invoice from the system - do you think that the whole invoice amount can just be posted to 'bad debts' or should £150 of it go to 'cost of sales'? and if so should that part include VAT?
:?
client owns a garage. customer got a bill for £300 + VAT, refused to pay it as the car was knackered. Client said he'd keep the car & knock £150 off the bill, but customer never paid the balance, so it needs writing off.
Client took out some parts from the car to use & scrapped the rest.
I'm entering a credit note to clear this invoice from the system - do you think that the whole invoice amount can just be posted to 'bad debts' or should £150 of it go to 'cost of sales'? and if so should that part include VAT?
:?
0
Comments
-
Re:Bad debts
I would write the whole invoice off. The Taxman will get there money at the end of the day because when your client raise's the sales invoice for then work he's done using those parts, he will include his profit but won't get able to include the cost of sales.
Regards
Dean0 -
Re:Bad debts
where's that star icon?!
i knew there would be a simple answer - i just couldn't think of it!
thanks very much0
