Using Write-Offs in Microsoft Dynamics GP to Keep the AR Clean
Often in Accounts Receivable, invoices are not always paid to the exact amount. If invoices are not fully applied the document will remain open and clutter up the Aged Trial Balance and Customer Statements.
Writing off these amounts during your cash receipt entry process in Dynamics GP will ensure a cleaner Account Receivable.
Write-off Underpayments When Entering Cash Receipts
Watch for remaining balances when you enter the cash receipts and use the write-Off field when applicable.
For example, my customer has an invoice for $1,000.90 and they miss the $.90 and send a payment for $1,000.00. At the point of entering the cash receipt I can deal with the underpayment.
When I enter the cash receipt amount notice in the Apply Sales Documents window that the Amount Remaining is $.90. The sales document is not fully applied at this point and if saved this way the document will remain in an Open status.
If you decide to forgive this amount and completely apply the document, you can select to write-off the $.90 by entering that amount in the Write-off field.
The Amount Remaining is now $0.00 so this document can move off to HST when you complete the Paid Transaction Removal process, and will no longer appear on the Aged Trial Balance or Customer Statements.
If you miss the write-off at this point, all is not lost.
Completing Write-offs Through the Month End Routine
Write-Off Documents is part of the Accounts Receivable Month End Routine but can be completed at any time. With this tool you can write-off both overpayments and underpayments quickly and easily for all customers.
- Underpayments will create a Credit Memo and will apply to the sales document if the amount is less than the write-off limit allowed on the Customer Card Options.
- Overpayments will create a Debit Memo and will apply to the sales document if the amount is less than the write-off limit allowed on the Customer Card Options.
Upon completion of this routine, you can see in the Customer’s Inquiry View the Debit Memo and although the amount displays as $0.00, if you drill down you will see that $.90 has been applied to the original invoice. The net amount owing is now zero.
Setup for Write-offs in Microsoft Dynamics GP
To begin using the write-off ability in Dynamics GP, you will need to complete some set up. To do this, go to the Customer Maintenance Options Card and set the Maximum Write-off Amount. You will also want to be sure to add a valid GL Account on the Customer Account Write-off field.
Remember this write-off function is for writing off the nickels and dimes not for writing off bad debts.
If you are not currently managing these small write-offs and it’s cluttering your Aged Trail Balance, take advantage of the Month End Routine now! If you need help getting started, please contact us.
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