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Invoices that haven't been raised

jackieshepjackieshep Feels At HomeRegistered Posts: 68
Please can anybody help me.

My boss has got behind with raising invoices and too much time has passed so now can't raise them.

Should we raise the invoices internally but not send them to the customers, and then write them off as bad debts at year end?

I wondered if this should be done as in the future if there is a VAT inspection, there will be several items that have been purchased but will not relate to a sale, therefore showing an incomplete transaction, as the records are incomplete. It could also be seen as items being sold for cash which is obviously not the case. Secondly the audit could also pick this up, although being a small company a full audit is not necessary.

Any comments would be appreciate

Comments

  • Claire321Claire321 Well-Known Registered Posts: 209
    Is it really too late to send the invoices to the customer? How long ago was the sale? They might just think they didn't receive the invoice and your credit control is a little lax?
  • blobbyhblobbyh Font Of All Knowledge Registered Posts: 2,415
    Your clients may also have accruals in their accounts waiting for your invoices to be received. We have IT accruals worth £80k going back nearly two years but if the supplier can't be bothered to bill us, then we're certainly not gonna chase him as it'll seriously dent our current cash flows.

    Are you a limited company? I'd be dubious about writing off stock that has been purchased and yet no longer there having been allegedly "sold" without invoice and receipt of payment.
  • PoodlePoodle Experienced Mentor Registered Posts: 711
    Are you running a charity?

    I would raise the invoices now and send them out with a covering letter of appology.

    I had reason to reprocess several years of a clients bookkeeping system a few years back and discovered quite a few invoices that had not been raised for work completed and totalling a significant amount of money.

    You could use this as a personal project and collect the monies for your boss. He may give you a pay increase or a one off bonus based on a percentage of what you recover, for your trouble.
  • RinskeRinske Font Of All Knowledge Registered Posts: 2,453
    We recently received an invoice for expenses incurred in the rebuilding of number of our new shops. These shops have been running for over a year now and they forgot to invoice us the expenses (they did invoice us for all the rest). The invoice was about 9k in the end and we paid for it.

    The supplier did ring their contact first and discussed it with them, before sending the invoice.

    Could you do something similar?
  • jackieshepjackieshep Feels At Home Registered Posts: 68
    Many thanks for your help everybody, much appreciated.
  • MargaMarga Experienced Mentor Registered Posts: 981
    hello never is too late


    i have just had to print and send 1642 invoices to our customer date range between April 2009 and January 2010

    Although we sent them recorded delivery they claim they never received them and therefore not paid them

    our Credit controller didnt do a good job either chasing this up anyway so we ended up with £500K debt

    NOW it is resolved and customer pays invoices on due date

    they had actually an internal problem with their process

    so my suggestion is raise the invoices even if it is long overdue now
  • jackieshepjackieshep Feels At Home Registered Posts: 68
    Thanks Marga
  • RinskeRinske Font Of All Knowledge Registered Posts: 2,453
    Just reviving this thread for now, but I just got 2 letters from a supplier, chasing payment of invoices raised mid 2008. We paid them the month after, so also 2008 and these are the first chasing letters I got from them.

    I called them and they took the liberty to ask for the remit of the payment and the bank details we paid it in to, so they could track the payment, without explaining why they only just started chasing now...

    Now I'm all fine with trying to find the details back, but I would expect a little bit of explanation why they only start chasing the invoices now or why the letters have been sent.

    Is this something that sounds familiar to people and if it does happen, would you expect a bit of an explanation as to why they start chasing invoices all of a sudden?

    I did resist the urge to ask in my email if this was an early April fool's joke though!
  • MILLY21MILLY21 Feels At Home Registered Posts: 59
    I think it would just show a bit of courtesy for them to inform you how this has come about.

    If they got my back up though I'm afraid I wouldnt be rushing to furnish them with the info!!

    It took Corus almost twelve months to chase a £19k invoice with us that they had never sent and then became very "arsey" with us saying we took delivery of the goods so we should have been looking out for the invoice!! I did ask why it had taken them so long and they said they had a new computer system in place or some other dribble. Sadly they are no more but if they "forgot" £19k we owed, I wonder what the total amount forgotten must have been.
  • RinskeRinske Font Of All Knowledge Registered Posts: 2,453
    Good point!

    I sent the woman I spoke to all the details, but was wondering why I was supposed to do this, if she couldn't be bothered to have a look for it.

    We had it a couple of months ago, where a supplier changed their bank details and provided us with the wrong bank details on the letter with the changes. We paid them one time in the bank account and then got the amended bank details from their credit controller, but she kept chasing us for the payment.
    We told them numerous times we paid and in what bank account and she just kept saying they couldn't find it and we should pay them. As it was over 70k we didn't want to pay it again in the hope that they would find it back and refund us (I wouldn't do that with an invoice for 5 pounds either, if they can't find a payment), but she just put us on hold in the end. At that point our operations director got quite angry with them and threatened to swap all business to a different supplier if they wouldn't deliver and sort out the payment. And they all of a sudden found it within one hour and called him back it was sorted.

    It makes you wonder though what some suppliers are doing.
  • NeilHNeilH Trusted Regular Registered Posts: 547
    Hi

    Its worth noting that VAT is due on output supplies and not rasing an invoice and just writing the debt off wont remove the VAT liability on the outputs in question as they are not bad debts.

    Neil
  • MargaMarga Experienced Mentor Registered Posts: 981
    Hi Rinske

    I think it is a good point that you can add to your email that due to being 2008 and due to Company policies, things that have been already cleared are archived and to bring back information you need to fill in some form or something so if they could give you a reason why this is being chased then you could actually push through it quickly :)
  • RinskeRinske Font Of All Knowledge Registered Posts: 2,453
    Actually, the 2008 stuff is in our archive in far far away land and to get it back, I need to get a colleague to go collect it, which is quite far out of everyone's way and not in anyone's interest.

    So I hope she can find it based on my email and otherwise she can go to the airport for me and collect the stuff I need! :)

    Seriously, I think we might have the bankstatements on site still, but most of the stuff of 2008 has been brought to the archive off site already, so realistically I can't help her any more anyways.
  • anniemanniem Experienced Mentor Pewsey, WiltshireRegistered Posts: 1,326
    If it helps; I have just received in the last week two invoices from a company we deal with dated 31 July 2006 - and we are going to pay them, no question!

    I was a bit annoyed, because being a farming enterprise and in a profit share arrangement with our contract farmers the Harvest 2006 profits have been reduced, but that is our problem, not the suppliers - they did the work and should be paid accordingly.

    Anna
    FMAAT - AAT Licensed Member in Practice - Pewsey, Wiltshire
  • anniemanniem Experienced Mentor Pewsey, WiltshireRegistered Posts: 1,326
    OK I've just realised that this is an old thread revitalised. My last really doesn't help much. Never mind, it's there for posterity!

    The lunatics have taken over the asylum!!!!!
    FMAAT - AAT Licensed Member in Practice - Pewsey, Wiltshire
  • RinskeRinske Font Of All Knowledge Registered Posts: 2,453
    I revived it a couple of days ago, so not that old!

    It's a shame tho that they are this late with sending you the invoices!

    We had a few very big invoices a while ago, when a company forgot to invoice us for expenses they made, we paid them as well, but it wasn't that old!
  • elliewynelliewyn Just Joined Registered Posts: 3
    Glad this thread got revitalised!

    I work for a small not for profit, and we've just had a batch of invoices from a supplier, whom I threatened not to pay unless he got them in for year end. He's included one invoice from the previous financial year (08/09) which is for more than the accrued amount and is dated for the year just gone (09/10). I only got a verbal notice of the amount to accrue, but conversely, there's no proof that the higher amount was agreed either.

    I'm thinking I should only pay the accrued amount unless he can prove the higher amount. What do you guys think?
  • RinskeRinske Font Of All Knowledge Registered Posts: 2,453
    Working on a very strict purchase ledger myself and I would not blindly pay what any supplier says is due.

    Everything we pay needs to be signed off by the department manager or higher, depending on the amount.

    Go back to him, ask why the price is different or check with who-ever ordered the goods and make sure he is not just happily overcharging you or has changed it for unknown reasons.

    I would not just pay the accrued amount either, as you pay an invoice and not an accrual, but then again, all our payments need to be backed up by the proper paperwork and that should match completely, or the payments won't be signed off.

    Now I think a strict purchase ledger is good in some respects and less good in others (sending an invoice to a department manager because of less than one pound different on an invoice over 10k seems a bit over the top to me), but mainly good, as it does avoid paying the wrong amounts most of the time or paying something you returned to the supplier etc.

    I would definitely get an explanation and not just pay either amount.
  • elliewynelliewyn Just Joined Registered Posts: 3
    That's helpful, thanks. I'm ex local authority, and always thought that work undertaken in one financial year should be invoiced in the same financial year. Is that just a local government rule?
  • RinskeRinske Font Of All Knowledge Registered Posts: 2,453
    I'm not sure about the rules on that. We haven't got a rule like that, but have extended accruals at the end of the year, compared to the end of the month closings.

    So we're definitely not living up to that, and last week we received three invoices from January 2008, which still need to be paid. I'm waiting for authorisation before paying anything, so they will have to wait. It seems to happen quite a lot here that sales and marketing don't pass invoices over to the accounts department and therefore we do often have late invoices, but the last few month's we had a lot of 2008 stuff and that is not so common luckily.
  • elliewynelliewyn Just Joined Registered Posts: 3
    Thanks for that. We deal with a lot of creatives, I'm lucky to get invoices at all, half the time. I'll ask him to reinvoice for the agreed amount, unless he can prove the higher amount was agreed.

    I'd forgotten about this forum, and how useful it is!
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