Bank Balance not matching QB balance after VAT adjustment

THyland · ‎September 12, 2019

I recently registered for VAT, and made an adjustment to line 4 of my first return to claim back the VAT for hardware purchased in the previous year before registration.

My payment to HMRC has now been made, and I have synced my bank account and matched the payment to the QB record.

My bank balance and QuickBooks balance now differ by the exact amount of the adjustment.

QBO has been used to manage my accounts the entire time; for when I purchased the hardware prior to VAT registration all the way through to now.

John C · ‎September 12, 2019

Hi Thyland

From the previous posts it appears that you have created the VAT adjustment and allocated the adjustment to your bank account. Locate the adjustment in your bank account and delete it. You will then have to re-create the VAT adjustment ensuring that you allocate it to the correct account. As it is box 4 that you are adjusting you can create an expense account called for example VAT Expense Adjustment account, ensure you create the adjustment for the same date as the initial adjustment.

We are not trained accountants and therefore we always advise customers to clarify our advise with an accountant, in this instance they may want you to allocate the adjustment to a different account.

View solution in original post

JamesDuanT · ‎September 12, 2019

There's always a way to correct things in QuickBooks Online, THyland.

VAT adjustments create journal entries to make sure the affected accounts are balance. This might have caused the difference in your QuickBooks and bank balances.

There are different ways to correct this, which depends if the amount increases or decreases your QuickBooks bank register:

I'd recommend reaching out to your accountant about this. They'll give you enough explanation of which transaction to create.

I'll also share these links that are related to VAT payments or refunds:

It's always best to consult accounting professionals when dealing with this kind of concerns. They can give you more options and ensure that your data is correct.

Let's us know if you have further questions.

THyland · ‎September 12, 2019

Reviewing Adjust your VAT Liability I think I have found my mistake - I make the account for the adjustment the bank account and not an income account created for the purpose.

How I correct this is another question though?

John C · ‎September 12, 2019

Hi Thyland

From the previous posts it appears that you have created the VAT adjustment and allocated the adjustment to your bank account. Locate the adjustment in your bank account and delete it. You will then have to re-create the VAT adjustment ensuring that you allocate it to the correct account. As it is box 4 that you are adjusting you can create an expense account called for example VAT Expense Adjustment account, ensure you create the adjustment for the same date as the initial adjustment.

We are not trained accountants and therefore we always advise customers to clarify our advise with an accountant, in this instance they may want you to allocate the adjustment to a different account.

THyland · ‎September 12, 2019

Hi John C

I have located the journal entry but was nervous about deleting it! I am contacting my accountant about this before I proceed.

Thanks

Tom

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Bank Balance not matching QB balance after VAT adjustment