Write-Offs

Accounts Receivable Write-Offs

ISSUE: How do you record a write-off in A/R?

From time to time, a situation may arise where an invoice that is partially paid will no longer have its balance paid off for whatever reason (e.g. gone out of business).  In such situations, a method is needed to close the invoice and relieve the amount remaining in the Accounts Receivable GL.

Solution:

To write off an outstanding balance on an A/R invoice, 

1. Go to Accounts Receivable à Cash Receipt Management
2. Click New Regular 
3. Call up the account – at this point, the system will populate the grid with all outstanding invoices
4. Begin entering a cash receipt in the same way that you normally would if the account were actually making the payment
5. When you get to the Cash Amount prompt, enter the amount to write off
6. In the next (Re) prompt, instead of accepting the default of Payment Of Account, enter something to explain what this transaction is for (e.g. Write Off)
7. In the grid, make sure that the write off is being applied to the correct invoice
8.  Since this is not actually a payment, we do not want this transaction to hit the bank.   Therefore, use the Override G/L prompt to direct the write-off to the appropriate G/L
9. Click Save
   
   

The invoice will be closed so that it will no longer show as outstanding, the Accounts Receivable account will have that amount credited and the write-off account will be debited for the equal amount.  An  inquiry on the transactions in the A/R (customer) account will show the payment amount as well as the write-off amount, so that it will be easily seen what was done and why.

Please log a ticket with Edsembli FIN if you have any questions, comments or concerns with the above.