Recording Invoice with discount listed after Sub Total & VAT

[bsharp77]

Hi all,

Just trying to work out the correct way to enter an invoice just received from a supplier who has changed their accounting software and given us an invoice layout I haven't dealt with before.

The sub total and VAT are listed, followed by a 10% discount line and then the grand total.
This means the sub total and VAT aren't the correct figures to enter in our accounting system.

Is it ok to work out the discounted sub total and VAT and enter them, or do I have to enter the figures listed on the invoice and then raise a manual credit note for the discount?

All a bit confusing - don't know why the discount just wasn't applied at the line level and saved a lot of hassle.

Any help very much appreciated.

 

[DontAsk]

If the VAT is not calculated after the discount is applied then I would go back to them and question the validity of the VAT invoice.

 

[NicoJ]

Hi all,

Just trying to work out the correct way to enter an invoice just received from a supplier who has changed their accounting software and given us an invoice layout I haven't dealt with before.

The sub total and VAT are listed, followed by a 10% discount line and then the grand total.
This means the sub total and VAT aren't the correct figures to enter in our accounting system.

Is it ok to work out the discounted sub total and VAT and enter them, or do I have to enter the figures listed on the invoice and then raise a manual credit note for the discount?

All a bit confusing - don't know why the discount just wasn't applied at the line level and saved a lot of hassle.

Any help very much appreciated.

I tend to do the totals and a separate line for the discount to get the correct figures into the software.

 

[MyAccountantOnline]

@bsharp77 are you VAT registered?

 

[bsharp77]

@bsharp77 are you VAT registered?

Yes we are VAT registered ok.
Never had an invoice quite like it!
But they say it’s their new system and that’s how they are sending out all invoices.

I would have thought the invoice needs to show the actual sub total and VAT to be a proper invoice??

The only option I can think of is to manually write the proper discounted sub total and Vat onto the invoice and then enter those figures - but I’m pretty sure this isn’t the correct thing to do.

The more I think about it, the more I think the invoice is just all wrong!

 

[MyAccountantOnline]

Yes we are VAT registered ok.
Never had an invoice quite like it!
But they say it’s their new system and that’s how they are sending out all invoices.

I would have thought the invoice needs to show the actual sub total and VAT to be a proper invoice??

The only option I can think of is to manually write the proper discounted sub total and Vat onto the invoice and then enter those figures - but I’m pretty sure this isn’t the correct thing to do.

The more I think about it, the more I think the invoice is just all wrong!

It's difficult to answer without seeing the invoice and knowing what it's for but generally I'd enter each item on the invoice into your records so that it matches the invoice exactly. I wouldn't create a credit note.

It may help to have a read of this - https://www.gov.uk/charge-reclaim-record-vat/vat-on-discounts-and-gifts

 

[NicoJ]

Yes we are VAT registered ok.
Never had an invoice quite like it!
But they say it’s their new system and that’s how they are sending out all invoices.

I would have thought the invoice needs to show the actual sub total and VAT to be a proper invoice??

The only option I can think of is to manually write the proper discounted sub total and Vat onto the invoice and then enter those figures - but I’m pretty sure this isn’t the correct thing to do.

The more I think about it, the more I think the invoice is just all wrong!

It is the correct way to show a discount on a sales invoice. It is up to you to make sure you reclaim the correct vat. This is because it is optional and the seller must account for the full amount up until the discount is applied.

Post the invoice as one line and then a minus (or a discount on some softwares) to get the correct amount.

 

[bsharp77]

It is the correct way to show a discount on a sales invoice. It is up to you to make sure you reclaim the correct vat. This is because it is optional and the seller must account for the full amount up until the discount is applied.

Post the invoice as one line and then a minus (or a discount on some softwares) to get the correct amount.

I don’t know about correct - as we have many other invoices with the discount applied at line level.

In terms of our software - it’s pretty old and we can only enter the invoice as a single line, so I’d have to create a separate credit note, which is equally as wrong as adjusting the original invoice as far as I can see.

I can see how being able to adjust using 2 lines on one invoice would work. Maybe time to update our software at long last….!