This article explores the Reversing a Paid Bill module within Insight Legal.

On Insight, it is possible to reverse a paid bill. However, as the pay bill posting impacts many parts of the system (such as the bank reconciliation, aged debtors reports, and your VAT return if you are on a cash received basis), it takes several postings to reverse.

These postings are detailed below:

In this example, we are reversing a pay bill against a bill that was raised for £300 costs plus VAT, and included a disbursement of £100 plus VAT. The payment in this example was transferred from the client to the office using the O1 office pay bill posting.

1. To start with, the ledger will look something like this:

2. First, post an OA Office Credit Note for the Costs and Costs VAT amounts. Ensure you tick the ‘Credit Note Paid’ tickbox.

3. Post an O5 Office Transfer (or O2 Office Cheque if the original payment came straight into Office) to reverse the payment made for Costs and Costs VAT amounts on the bill. We will reverse the payment for any disbursements on the bill later on.

4. Post credit O4 Office Disbursements to reverse the disbursements originally included on the bill.

5. Bill the credit disbursement postings, ensuring you add VAT on top if you did this on the original bill. This essentially makes a disbursement only credit note.

6. Pay the disbursement credit note you just raised.

After this is done, the payment has been fully reversed. We now just need to raise the bill again so that it shows as outstanding, ready to be paid in future.

7. Your ledger will look something like this:

8. Firstly, repost the disbursements you credited out before. If you give these the same date and reference as the credit O4s you posted earlier, these items can be grouped together on the bank rec and ticked off in one go.