If you need to cancel a Transaction in the current financial year you need Method 1, if you need to cancel a Income or Expenditure Transaction processed in a closed financial period you will need to use Method 2.
Note: You cannot cancel a transaction that has already been submitted to HMRC for Gift Aid, or a transaction that has been included in the VAT 100 report..
Method 1 - Cancel Income or Expenditure Transaction in the current financial year
Select Transactions > Cancel Income or Expenditure Transaction.
Select the transaction you want to cancel.
Select the Income or Expenditure Transaction/s you want to cancel.
Click Continue.
On the Confirm Cancellation screen which appears, review the transactions you have selected to ensure you are cancelling the transactions you want to cancel.
Enter a Reason for Cancellation.
Click Cancel Transaction(s).
Method 2 - Cancel Income or Expenditure Transaction from a previous year
If you have uncashed cheques or direct debits, a paying-in slip or direct credits left over from a closed period and you want to clear these from the reconciliation page and retain a trail for audit purposes, you can enter a contra-entry transaction. This has the effect of reversing the original transaction.
To enter an Expenditure contra-entry:
Select Transactions > Enter Income as a Direct Credit against the appropriate Bank Account.
To enter an Income contra-entry:
Select Transactions > Record Payment as a Direct Debit against the appropriate Bank Account.
Once you save those transactions, you will have your the original transactions on your bank reconciliation screen along with the matching contra-entry transactions.
You can then reconcile these together and they will be cleared from the reconciliation screen.
If you need to include these contra-entry transactions in a year that you want to close, you will need to reconcile these to the last bank statement of the year you are closing with appropriate end of year dates.