I'm looking for some help please. One of our customers has started using a third party to handle their payments and will never pay the invoice amount as this is where they take their fee (but that's another story).
e.g. Invoice totals £925.20, however their payment is for £914.10, which has deducted their fee of £9.25 + VAT = £11.10. I'm using Sage Instant and I'm not sure how to record this. If I note their payment of £914.10 there will always be a balance on their account which will only increase with every further invoice. Will I need to do some sort of dummy credit to balance the account?
Hi Lorraine
So hows about an intro before we start. We always ask newbies!
Usual stuff - what prof body do you belong to, are you a bookkeeper or accountant, what qualifications, first role/previous experience, where up to in your studies-what exams passed/with what body/in midst of doing, where based, what you did before this role? That so of thing. Helps get to know you but also how best to pitch answers.
Also - can you please add your first name so that it appears in the signature bar on posts - via edit profile---> Signatures.
What yr version of sage instant? Does the payment handling company provide you with any breakdown of the amount take and indeed any documentation to show that VAT is involved? Are you able to confirm the payment handling bureaus name?
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Joanne
Winner of Bookkeeper of the Year 2015, 2016 & 2017
Thoughts are my own/not to be regarded as official advice,which should be sought from a suitably qualified Accountant.
You should check out answers with reference to the legal position
I'm bookkeeping for a family business. No formal qualification in Accounting and covered basic accounts and Sage during my HND at college. Previous roles are administrator, typist and PA and assisted a Purchase Ledger as on Office Junior 20+ years ago.
I'm using Sage Instant Accounts Plus (I hope that's the version you mean). The company, Invapay do everything on a portal but I have printed the transaction showing our invoice amount, their fee + VAT and how much they are paying us. Hope this is enough information. Thanks
The sage 'year' was what I was looking for as it's aids technical answers.
What you really need before doing anything else is an invoice for their fee and the vat. Never come across invapay, but most of these do provide somewhere within the portal the paperwork you need. If they don't then give them a call- you need it to be able to process the vat (assuming this particular fee attracts VAT, which Im sort of suspecting it doesnt)
Once you have that I can advise how to process it. (Without that it's a very different process.)
-- Edited by Cheshire on Wednesday 26th of April 2017 04:47:04 PM
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Joanne
Winner of Bookkeeper of the Year 2015, 2016 & 2017
Thoughts are my own/not to be regarded as official advice,which should be sought from a suitably qualified Accountant.
You should check out answers with reference to the legal position
Hi Joanne, not related specifically to Lorraine's question, but I'm a little confused, as this is something new to me.
The broker is paying an invoice for £925.20 but deducting a fee of £11.10 before paying it? I've heard of invoice factoring but this looks a little different in that the person who is owed the money is charged the fee rather than the person who owes the money. Have I read it right?
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John
Any advice given is for general guidance and professional advice should be sought applicable to your circumstances.
Yes that is correct - they are charging us the handling fee to receive our payment! Therefore, in order for us to cover the full amount, in future we will add a service fee charge to the invoice to cover this (we haven't done this on these two particular invoices) and the customer is aware of this.
Joanne - I will check the Sage year in the morning - I'm presuming I can find this somewhere on the system? Also they seem to have charged VAT but will get onto the portal to find out if I can find an invoice. This is how I thought it would be done, however I was unsure how to marry a customer account with a supplier account. I need to somehow put the supplier invoice against the customer outstanding balance.
Quick question Lorraine (just on 2 min break) -have you signed up to their supplier agreement so they are the ones to issue th invoices to your buyers? Or do you invoice direct. (Have to say I would be recommending my clients to not accept such a method, unless it actually does get you the cash much quicker!!)
Oh and sage year version....go to 'About', usually far right of the top bar thingy near help, click on that and let me know the version. Or better still do me a screen print but get rid of any of your companies identifying features.
Sorry John.....not had my dinner yet and still in it!!!!! Laters.
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Joanne
Winner of Bookkeeper of the Year 2015, 2016 & 2017
Thoughts are my own/not to be regarded as official advice,which should be sought from a suitably qualified Accountant.
You should check out answers with reference to the legal position
The Sage version is 2014. We upload the invoice to the portal after they raise the purchase order. Payment is then received a few days later. There was no other option to do business with this company, it was something they just recently introduced and it was the only way to continue being a supplier for them.
Its ok Joanne, Lorraine confirmed my understanding, although I'm a tad worried you're in your dinner !!!!!????!!!!!
Thanks Lorraine, I suppose if it speeds up payment of the invoice and aids with cash flow thats a good thing, although you intend passing on that cost to your customer anyway so that's fine.
I look forward to the answer to your question as it sounds messy accounting wise.
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John
Any advice given is for general guidance and professional advice should be sought applicable to your circumstances.
Its ok Joanne, Lorraine confirmed my understanding, although I'm a tad worried you're in your dinner !!!!!????!!!!!
Thanks Lorraine, I suppose if it speeds up payment of the invoice and aids with cash flow thats a good thing, although you intend passing on that cost to your customer anyway so that's fine.
I look forward to the answer to your question as it sounds messy accounting wise.
Almost a head in the dish trying to stay awake long enough to eat it when I finally did get dinner!!
Pall will be revealed when we know about the Vat position.
__________________
Joanne
Winner of Bookkeeper of the Year 2015, 2016 & 2017
Thoughts are my own/not to be regarded as official advice,which should be sought from a suitably qualified Accountant.
You should check out answers with reference to the legal position