Hi Emma, I’m not sure if this will help but hopefully so. I work for a client in the construction industry and they have to record retention monies owed to them, paid usually 18 months to 2 years later. When they are paid, say £10,000 they might have £500 deducted and withheld as retention monies until the contract is complete. So I would record their payment at the time of £9500 plus vat, and then another invoice for £500 no vat. The £500 sits on the customer account so we can see what’s owed and then, when the contractor releases the retention monies plus vat, I would put a vat only invoice on and pay this off with the retention amount. I thought this would work for your customer’s instalment plan so hope that is useful for you.
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