Issued an invoice

Question

My manager earlier had collaborated under another company, so basically the company that my manager collaborated will receive the payment and later will transfer the payment to my manager's company, but somehow that particular company had made the payment to my manager's personal account and not to the company's account, and unfortunately my manager had issued an invoice to the company which he collaborated with. So how shall i record this? issued an invoice when you receive the payment to personal account and not to company's account?

Answer 1

The details were a little unclear. Please verify that I accurately understood the fact pattern and answered the question you asked. Please provide any feedback or corrections necessary for the fact pattern.

What was supposed to happen:

1. Company A (with Manager) provides services to Company B (another company)

2. Company A invoices Company B for services rendered

3. Company B pays Company A

4. Company C (Manager’s company) invoices Company A for assisting with services rendered to Company B

5. Company A pays Company C

What actually happened:

1. Company A provides services to Company B (another company)

2. Company C (Manager’s company) invoices Company A for assisting with services rendered to Company B

2. Company B pays Manager (personal account)

What needs to happen now:

Company A

1. Issue invoice to Company B (another company) for service rendered

2. Receive payment from Company B

3. Request invoice from Company C (Manager’s company) for assisting with services rendered to Company B

4. Pay invoice from Company C

Journal Entries:

Invoice for Services to Company B

Debit A/R

              Credit Service Revenues

Cash Receipts for Invoice to Company B

Debit Cash

              Credit A/R

Invoice from Company C for assisting with services rendered to Company B

Debit Consulting Expense

              Credit A/P

Payment of invoice from Company C

Debit A/P

              Credit Cash

Company C (Manager’s company)

1. Receive payment for invoice for assisting with services rendered to Company B

Journal Entries:

Cash Receipts for invoice to Company A for assistance with services rendered to Company B

Debit Cash

              Credit A/R

Manager (personal)

1. Request credit memo from Company B for incorrect payment

2. Return payment to Company B

3. Request receipt for returned payment.