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Write off's

Caroline Buckland Updated by Caroline Buckland

Inserting a Write Off

Occasionally during the settlement of transactions or account balances there may be a short fall in payment.  Where this occurs, a company may deem it appropriate to write off such discrepancies by creating a write off either manually or by Reason Code.

Inserting a Manual Write Off

Menu Access: Accounts Receivable>AR Processes>Cash Allocation>Allocation

Your header details will have already been entered, here is a reminder of the process Cash Allocation - Help | Financials

When creating a manual write off during an allocation routine a new line must be inserted.  The fields required to be entered are:

Reference

A user-defined transaction reference is entered.  Normally this will identify the transaction whose value is being written off.

Legend

The adjustment legend ADJ must be entered. A write off is classed as an adjustment. 

‘Fn’ Field

When a manual write off is being entered, the Subtype that relates to the write off must be entered in the ‘Fn’ field.  Because this is a pre-defined code the ‘Prompt’ action may be used.

Base Value

The value that is to be written off must be entered in this field.

Example

Reference  Legend  Status  O/S Balance  Fn        Base Value

INV001       INV         OUTST       1000         P

CASH354   CASH     U/ALL          -995         P

In this example, we can see that we have a shortfall in cash of £5. 

On the next available line enter the following: Enter the following:

Access the Queries/Disputes tab.

Against the Invoice use the prompt action in the Reason Code field and locate the write off code.

Example of Reason codes after the prompt action has been used.

Return the Write-Off code.

Debit notes can also be created if preferred, select the DBN reason code.
Note the General ledger posting account codes are against the sub types that are attached to the reason code.

Press enter on the keyboard and the following new line is added.

Enter a value of -5 in the Allocation Value field.

On validation the Cash Value Indicator will display 0.00 allowing the user to update and the relevant posting to the General Ledger will be made for the write off based on the Subtype that has been entered, as above.  If the Base Value exceeds the pre-defined ‘Tolerance Value’ setting in Company Controls then an error message will be displayed. 

Save the allocation.

The following will be displayed in Enquiries.

The write off transaction will then be displayed in Account Enquiries.

Details
On-line approval using the Business Event Manager can be used to ‘authorise’ bad debt write offs.

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