Nominal codes after VAT return
lozza10
Registered Posts: 5 New contributor 🐸
in Bookkeeping
Hi I have an invoice that has been included in last quarters VAT return but I need to change the nominal code. Will this affect anything at all?
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Comments
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Hi @lozza10
I hope you are well?
There is two ways of doing this, you can raise a dummy credit credit note but you must make sure it is the opposite entry of the original invoice (using the incorrect nominal code). Then post the invoice again using the correct nominal code. When you raise the dummy credit and post the invoice again make sure to post it with VAT. This in effect on the next VAT return will just clear out because it will be a Debit and Credit. I must admit not really keen on this option though the next option is below :
I am not too sure based on your question whether it is a Sales Invoice or Purchase Invoice. If it is a Purchase Invoice then you will notice the Net amount will be Debited in the Expense Account. In order to correct this, raise a journal to Credit the Expense Account it is currently incorrectly in and Debit the correct Expense Account. That will correct the error made without affecting the VAT Return.
If it is a Sales Invoice then the Income code will be Credited - Income Code. All you need to do is raise a Journal to Debit the Incorrect Income Code that it is in right now and Credit the correct Nominal Code. Same with this it will not affect your VAT Return on the next submission.
I hope this helps you out.
Kind regards
Sham0 -
Depends on what your trying to do and which software. some software will allow you change nominal but the safest way would be a journal entry moving from incorrect on to the correct one.RegardsCiaran Andrew Leyland0
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Assuming the VAT element of the invoice was accounted for correctly then a straight forward journal removing the net value from the incorrect nominal account and adding it to the correct account should be sufficient.
The internal credit/invoice re-entry method mentioned by shamilkaria is very useful when the correction is a bit more complicated or involves multiple lines/codes - but in this instance a journal is probably cleaner.1
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