Apply Write-Off Small Balances Adjustments

If a customer has a small balance remaining on an invoice, you can write off the small balance. This is useful to allow you to remove the open due amount so the invoice doesn't display as open and available for dunning.   

Writing off small balances is a decision made by each organization, and the amount which qualifies as a small balance is also determined by each organization.

Configure an Adjustment Receivable Transaction Type

You only need to create an adjustment receivable transaction type one time. After you create it, it is available for use until you retire or delete it. If you do not have an existing adjustment receivable transaction type:

1. Click the Receivable Transaction Types link from the Main Menu. The Receivable Transaction Types screen opens.
2. Click the Add button. The Add Receivable Transaction Types screen opens.
3. Enter the necessary information:
   
   • Description - Name of the adjustment transaction that displays to users.
   • Type - Select Adjustment.
   • Source - Area of the system the adjustment transaction type is available.
4. Select the GL Distribution Tab to configure the necessary GL Distribution for the adjustment.
5. Click OK.

Apply the Adjustment

1. Click the Invoices link from the Main Menu. The Invoices screen opens.
2. Select the invoice for the adjustment.
3. Right-click and select Add -> Add Payment. The Add Payment screen opens.
4. Select the adjustment receivable transaction type created in Configure an Adjustment Receivable Transaction Type from the Transaction drop-down.
5. Click OK. The invoice is updated so there is no longer an open amount due.

If needed, create a journal entry to recognize the adjustment in the General Ledger. Adjustment transactions do not appear in Cash Receipts screens so you must manually generate the journal entry.

Automatic Write Off

You can configure accounts receivable to automatically write off of invoices from the Cash Batch Posting process and the Invoices screen.

To process the correct journal entries using automatic write off, create a new transaction method and appropriate receivable transaction types including the GL distribution for each invoice source used (for example, Events, Fulfillments, Membership, Payment Plans).

Any invoice selected or included in the Cash Receipt Batch for the posting process and any invoice selected on the Invoices screen is written off if:

• The automatic write off feature is enabled.
• The value of the write off is less than or equal to the value entered into the Maximum Write Off Percent or Maximum Write Off Amount fields.
• The write off transaction type exists in Receivable Transaction Types.

To configure automatic write off:

1. Click the Accounts Receivable Configuration link from the Main Menu. The Accounts Receivable Configuration screen opens.
2. Select the General tab.
3. Expand the Other section.
4. Enter the necessary information:
   • Automatic Write Offs Enabled - Check the check box.
   • Maximum Write Off Percent - Percent of the original invoice to automatically write off. 
   • Maximum Write Off Amount - Maximum amount that can be written off automatically. A write off greater than 10000 local currency amount is not allowed.
5. Click OK.

To write off amounts from the Invoices screen: 

1. Click the Invoices link from the Main Menu. The Invoices screen opens.
2. Select the invoices to write off. Use Ctrl+Click or Shift+Click to select multiple invoices.
3. Right-click and select Tools -> Write Off Invoices. The Write Off Invoices screen opens.
4. Enter the date for the write off into the Write Off Date field.
5. Click OK.