I want to transfer some Customers to separate independent company. We have sold a geographical area to one of our employees and he has set up a company to manage those customers. The deal was done effective 1st February, so I want to back out the Invoices and Payments that have been received for certain Customers for the last two months.

What would the accounting entries be in my Company ?

Hi Alan,

To 'undo' the invoices and payments, you can simply delete the invoice payments then delete the invoices. Alternatively you can record 'reversing' transactions by creating credit notes (to reverse the invoices) and then refund payments (to reverse the invoice payments).

If you have issued the invoices to your clients you may be required by law to keep a record of the invoices. I recommend you check this with your accountant.

Regards,

Mark

Thanks for your reply. Your suggestion is not quite what I am looking for because if I delete the invoices and the payments – that would give the effect that the transactions ‘never happened’ – but of course they did and the bank statement reflects that.

What I am trying to achieve is to reverse out the income (credit notes against the invoices) and to make a single payment of the total of the credited invoices, to the new company.

I just can’t figure out how to do that.

Hi Alan,

I see what you mean now. Unfortunately I'm not familiar with the kinds of accounting entries you need to produce - you will need to talk to your accountant about this. Sorry.

Regards,