Reconcile a customer payment made to the ATO

The customer says the invoice was paid elsewhere

A customer advises that it paid money to the ATO under a garnishee notice rather than into your business account. Give the notice and remittance information to your tax adviser promptly. The immediate accounting task is to establish what was paid and how it relates to the customer balance and tax account, without guessing from the missing bank receipt.

Obtain the payment detail

Imagine a glazing business expecting payment for two invoices when the builder reports an ATO-directed transfer. Ask for the date, amount and reference through the appropriate contact. Preserve the original advice. Do not assume the transfer equals the full customer balance or covers both invoices simply because the builder describes the account as paid.

Keep the records connected

business.gov.au recommends secure storage and backups for financial records. Keep the remittance, relevant notice and accounting correspondence together with links to the affected invoices. Record questions separately from confirmed facts. That gives the accountant a traceable file rather than disconnected screenshots spread between the owner, bookkeeper and customer account manager.

Source: business.gov.au: Record keeping

Check both sides with the adviser

Ask the accountant how the customer account and tax account should reflect the confirmed transaction. Identify any difference between the remittance amount and the amount recorded as applied. Avoid posting a second cash receipt to the bank ledger merely to clear the invoice. The bookkeeping should describe the actual flow of money.

Correct the collection workflow

Once the position is confirmed, adjust reminders for the affected amount and communicate accurately about any remaining balance. In the glazing example, automated chasing for the whole invoice may cause confusion if a verified payment has already been directed elsewhere. Equally, do not clear unrelated invoices just to make the account stop appearing overdue.

Use the confirmed cash position

Update the forecast to show the money actually available to the business. Continue taking advice about the notice itself and any proposed response. Reconciliation does not decide whether the notice is correct or change its terms; it ensures the business, customer records and tax records are being assessed from the same verified transaction information.