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• # 118934
• Wed 29 Jul 2020 03:25 PM

Hi,

My client (a VAT registered LTD company) has an order for a certain amount of supplies.  He made some of the supply in Dec, Feb and March 2020 and the remainder is still to be supplied.  He has not invoiced his customer for any of the supply yet and states that he will invoice once the full order is complete.  I have indicated that we should do an income accrual in the accounts for these sales up to March 2020 but he does not want me to do that - mainly because he is the kind of client who wants things to not be complicated. 

I do not know what the value of the supply is up to end of March but I guess it will be about £1,500.  Currently annual sales are quite low so this would represent about 15% of annual sales.

Should I insist on posting an accrual for this and getting the information from him on the value of supplies made or would it be OK for the sales to be reported in 2021 accounts when the final invoice is issued. 

Thanks

Nell

• Nell

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• # 118936
• Wed 29 Jul 2020 05:51 PM

Hi Nell,

My understanding is that being a VAT registered Ltd company the sale(supply) which is already made must be recorded as an income. HMRC may ask to produce invoices for the supplies which are already made. The supplies which need to be done can be accrued as an income by passing the journals if your client's accounts are on accruals basis.

Sales receivable dr

sales credit.

Thank you very much.

Kind regards,

Mehul Dave MICB

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  Thank you very much.

  Kind Regards,

  Mehul Dave MICB PM Dip

   

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