I have an invoice (supplier) to put onto sage. It states Base for VAT 156.91 plus VAT 31.38 Amount due 194.4 This is if we don't take advantage of 6.11 discount. I have looked back and the previous book-keeper has had problems previously due to the fact that the owner sometimes pays on time and not others. I would like to get this right from day one so I was wondering the best way to post the invoice?
The VAT should be calculated on the discounted amount, so that looks right. I believe that stands regardless of whether the discount is taken or not, although I'm sure there are more seasoned commentators who will have chapter and verse on this.
I think your transaction should be:
Net £163.02 VAT £31.38 Gross £194.40
If you pay the discounted amount - £194.40 - £6.11 = £188.29 - then you obviously show the £6.11 taken as discount and the VAT will be right.
