I have missing sales invoices

I have missing sales invoices

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Hello

I am preparing a set of accounts. I carried out a bank reconciliation and realised that there are some missing sales invoices. I raised this with the client and he told me he may have lost those invoices. I have asked him to provide me with copies (more than once) , but as yet nothing.

Can I just pick out the credits from the bank statements which I know relate to specific jobs which he completed during the accounting period. Then highlight the situation in a covering letter to the client when I post him the accounts?

Does this sound reasonable?

Replies (5)

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By claudialowe
18th Jul 2014 15:15

I would......

I would do that - what other options are there.  Ask the client to (kindly!) try and remember who the payments were from, and if they can, then they can re-create an invoice.  I am dealing with a very similar situation, half a dozen cheques paid in over the year, and they don't have the first clue who they could be from :-(

 

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Stepurhan
By stepurhan
18th Jul 2014 15:30

That's what HMRC will do

In the event of an enquiry, HMRC will assume all income you cannot show came from somewhere else is business income. Unfair if it is isn't but hard to dispute without some evidence to the contrary. I am assuming that the client is unable to account for these bankings any other way.

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By Alex999
18th Jul 2014 16:06

Most of the credits to his bank account are for work and he has said he is happy for me to treat all of these as income.

He also has made some purchases and not kept/lost the receipts. I am going to include everything from his bank statements which is missing an invoice/receipt but warn him that he needs to start keeping better records.

 

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By bendybod
18th Jul 2014 16:14

Yes, I would always go with the approach of assuming that bankings are business unless he can prove otherwise.  In terms of expenses though, HMRC would be more likely to go the other way and assume they are personal unless you can prove otherwise.  If they are clearly to trade suppliers then fine but if they are not then I would seek written confirmation from the client that he considers them all to be business expenses. 

It definitely sounds like a conversation with the client regarding record keeping is required!

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By SimonP
28th Jul 2014 03:22

All well and good but . . .

. . . what about any cash income? That will not show up on bank statements if it hasn't been banked. Has the client ALWAYS been paid by cheque or bank transfer? That would at least show a pattern should HMRC come calling.

If cash has EVER been received for work done/sales, then any inspector (or whatever they call themselves these days) worth his salt is going to add on a figure just for the sheer hell of it and let you and the client argue it down.

With the above in mind, my advice to clients is to always bank any cash and draw it out as necessary, so that there is a paper trail.

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