Corrections & audit history

Bookkeeping in ac-co.ai is append-only: once something has been posted to the ledger, it is never edited in place and never deleted. A correction is always a new record that says what changed, who changed it, when, and why. That is what lets you (or HMRC, or your auditor) reproduce your books exactly as they stood on any past date — including the day you filed a return.

This page covers what that means in practice for the four things people most often need to fix: a journal entry, an invoice you have already issued, a bill you have already paid, and a period you have already reported.

How a correction works

When you correct a posted journal entry, ac-co.ai posts an equal and opposite entry alongside the original. The two together net to zero, so your reports are right, and both halves stay on file, so the history is intact. The original is marked as superseded rather than removed, and the correction records the reason you gave.

Because the original and its mirror always travel as a pair, a corrected transaction can never leave a stray balance behind in a control account — the classic symptom of a "deleted" transaction in other systems.

Correct a journal entry

1. Open Journal entries and select the entry (or tick several and use the bulk action bar).
2. Choose Delete or Reverse — the wording depends on your workspace's journal presentation setting.
3. Confirm. ac-co.ai posts the opposite entry and records the reason.

Opening any entry shows a Corrections panel telling you what this entry reverses and what reversed it, so you can follow a chain of fixes in either direction.

Only posted entries can be corrected, and only once — an entry that has already been reversed cannot be reversed again, which stops the same movement being cancelled twice.

Choose how corrections read

Go to Settings → Journal presentation. There are two wordings, and they change wording and the everyday list only — never the books:

• Delete (recommended) — deleted entries leave the everyday list. The reversal pair is kept in full and stays visible in Audit history and every report.
• Reverse — every original and its mirror entry are shown, with accounting reversal language throughout the journal.

You can set the default for everyone in the workspace, and each person can override it for their own account.

Correcting a document

An invoice or credit note you have already issued

A Draft is freely editable — change anything, or delete it outright; nothing has been posted and no number has been used.

Once you issue it, a sales document is frozen. That is deliberate: a UK VAT invoice has been handed to your customer and must never change afterwards, and its printed version is frozen at the same moment (so later edits to your address, VAT number, bank details or branding do not rewrite a document somebody already holds). To correct an issued invoice you either:

• issue a credit note for the part that was wrong, and raise a fresh invoice if needed; or
• void it and reissue. A voided document keeps its number — UK VAT numbering is never reused or re-sequenced — and points at the document that replaces it.

A bill or receipt you have already paid

Purchase documents freeze once they carry settlement evidence, because editing one would leave half of an already-settled double entry behind. To correct one:

1. Unmatch the payment from the bill. This reverses the payment entry and retracts the match.
2. Edit the bill — now unsettled, it re-posts its own accrual.
3. Re-match the payment.

An unsettled bill can simply be edited; it keeps itself in step with the ledger automatically.

Restating a period you have already reported

When an error is found in a period that has already been closed, locked or reported, the sanctioned route in is a restatement — the only thing allowed to post into a locked period, and always with an actor, a reason and a timestamp attached.

1. Go to Reports → Restatements and start a new restatement.
2. Pick the period, then the materiality:
   • Material — reverse & repost: the original entries are reversed and corrected entries posted in their place.
   • Immaterial — record only: the correction is recorded without moving the closed period's figures.
3. Write the reason — what was wrong, and why this correction.
4. Select the original entries being corrected, and the repost entries where applicable, then post it.

As originally reported vs as restated

Every restatement in the list carries a Compare pair of links:

• As originally reported — the trial balance or statutory accounts exactly as they read at the moment the period was originally locked.
• As restated — the same report today.

Both come from the same rows; nothing is duplicated or kept in a side copy. You can also reach any past instant by hand: on the Trial balance and Statutory accounts tabs, set As recorded at to a date and time, and press Live to return to today's figures.

What happens to VAT in a correction

Corrections that carry VAT are checked rather than taken on trust:

• A correction may state its own VAT treatment, rate and amount, and those are validated against the same rules a normal document is held to.
• A correction is refused if it tries to declare VAT for a supply the original document already declared — so a fix can never double-count output tax.
• The VAT return reads a correction as what it corrects, so it lands in the right boxes rather than being lost or arriving twice.

HMRC's Making Tax Digital service has no "amend" operation for a VAT return, so a correction to a period you have already filed is picked up on the next return (or, above HMRC's threshold, disclosed on a VAT652). A re-filed period therefore posts nothing new — the liability is already on your books.

Filed returns stay reproducible exactly as filed: when ac-co.ai re-proves a submitted return, it recomputes it as the books stood at the moment of filing, not as they stand today. Later corrections change what the next return says; they never rewrite one you have already sent.

Closing, locking and reopening a period

Settings → Accounting periods lists your UK tax year, VAT, MTD ITSA, PAYE and corporation-tax windows for the selected legal entity, and holds the Month-end close checklist — a step-gated run that reconciles, flags what needs your attention, drafts fix proposals, writes a close memo, and then locks the period when you press Confirm sign-off & lock period.

A locked period refuses new postings. If you genuinely need to go back into one, Reopen it: reopening clears the lock, is recorded on the audit trail, and requires a reason.