Accounts adjustment

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A company (A) invoiced a client (X), but the client mistakenly paid a sister company (B) instead. The user is seeking advice on how to adjust this payment in the books without transferring funds between companies A and B, and how to handle the associated TDS implications. Experts suggest using a journal voucher for adjustment or obtaining a cheque from company B, clarifying that TDS should have been deducted by the client (X) in the first place.

Kavita Bisht

Kavita Bisht (Querist)
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22 February 2020 One company(A) had raised an invoice to their client (X) and that client has made payment to his sister concern company (B). So, now how to adjust this payment without transfer to that company(B) ?. Now, I raised the invoice from B company to A company of that amount but now I am facing the issue in TDS. If I have taken this invoice in A company and invoice amount transferred to X company but now I have required to deposit TDS and that TDS amount in debit. Please suggest how to adjust and what to do?

Read more at: https://www.caclubindia.com/experts/accounts-adjustment-2783959.asp

GN Patankar

GN Patankar (Expert)
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01 March 2020 Dear Ms Kavita , I understand from your query that "A" has raised invoice upon "X",
now X has to pay amount to A, instead of payment to A, X had paid to "B" , Please adjust book entry between A & B by journal voucher or take cheque from B.
Issue a tax invoice upon B is not understand.
As far as TDS is concerned it has to be deduct by X only.

GN Patankar

GN Patankar (Expert)
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01 March 2020 Dear Ms Kavita , It understand from your query that "A" has raised invoice upon "X",
now X has to pay amount to A, instead of payment to A, X had paid to "B" , Please adjust book entry between A & B by journal voucher or take cheque from B.
(Issue a tax invoice to B is not understand. If there is a transactions between A & B than TDs will be in in the books of B )
As far as TDS is concerned it has to be deduct by X only of company A

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