Write off small sales values

You may find that you have small values left on your accounts. This may be due to rounding, discrepancies, or a customer who owes so little that it is not worth chasing for payment. In such cases, you can use the Write Off Small Amounts option.

Up to 50,000 records can be displayed at once, and you can write off up to 1000 sales values, on a customer account. You can write off sales values, even if the associated transaction is part allocated. If you need to write off more than 1000 values, select the option again, and make a further selection of values to write off.

The default transaction value to write off is 200 (base currency), however this amount can be changed.

The appropriate debit or credit note is generated automatically for each write off. The transactions are posted to the customer account and the Nominal Ledger accounts to update the balances.

When writing off values on a foreign currency customer account, the exchange rate applied to the original transaction is used to convert the value to base currency.

A report is produced for you to check.

If the write off is an invoice If the write off is a credit note
  • A credit note is posted to reverse the invoice to be written off, using the original document date as the transaction date and the original invoice reference. The value is allocated in full to the invoice.
  • An invoice is posted to reverse the credit note to be written off, using the original credit note date as the transaction date and the original credit note reference. The value is allocated in full to the credit note.
  • The customer balance is reduced by the gross value (plus VAT if appropriate) of the reversing credit note.
  • The customer balance is increased by the gross value (plus VAT if appropriate) of the reversing invoice.
  • Account turnover for this period (or next, if a future period date is entered) is decreased by the net amount (goods value) of the reversing credit note.
  • Account turnover for this period (or next, if a future period date is entered) is increased by the net amount (goods value) of the reversing invoice.
  • The bad debt nominal account, called Bad Debt Writeoff, is debited with the total net value of the write off.
  • The bad debt nominal account, called Bad Debt Writeoff, is credited with the total net value of the write off.
  • The output VAT account (for the balance sheet) in the Nominal Ledger, is debited with the VAT value on the original invoice. This does not include part allocated transactions, where you amended the VAT amount involved.
  • The output VAT account (for the balance sheet) in the Nominal Ledger is credited with the VAT value on the original invoice. This does not include part allocated transactions, where you amended the VAT amount involved.
  • The debtors control account (for the balance sheet) in the Nominal Ledger, is credited with the gross value of the reversing credit note.
  • The debtors control account (for the balance sheet) in the Nominal Ledger, is debited with the gross value of the reversing credit note.

Note: The central VAT file is not updated.

You must have:

  • Calculated the VAT element you can now claim, if you are dealing with a transaction that is part paid.

To write off small amounts

Open: Sales Ledger > Adjust Transactions > Write Off Small Amounts.

  1. Choose to Write off transactions from a single account or to Write off transactions from all accounts.
  2. If you want to Write off transactions from a single account, select the customer account that you want in Customer details.

  3. Accept the default Nominal Code for VAT Write Off or select the relevant nominal account from the drop-down list.

    If the system is set up to use cost centre breakdown, only the nominal account reference number needs to be specified. The necessary cost centre and department codes are attached automatically from the account header record.

    If the system is not set up to use cost centre breakdown for balance sheet postings, the full nominal account, including cost centre and department codes must be specified.

    If your nominal accounts are set up as follows (the first three accounts listed below are set up in default nominal accounts, and the fourth is set up on the customer account record):
     

    Bad debt write off

    		 

    68100

    		    

    (profit and loss)
     

    Default VAT output

    		  

    26100

    ADM

    ADM

    (balance sheet)
     

    Debtors control

    		  

    14100

    ADM

    ADM

    (balance sheet)
     

    Default nominal account

    31100

    SAL

    ADM

    		  

    and you write off a small value transaction for the following values (using a standard VAT rate of 17.5%):
     

    Net

    		 10.00

     

    		      
     

    VAT

    		 1.75

     

    		      
     

    Gross

    		 11.75

     

    		      

    the nominal posting results will be:
     
    If cost centre breakdown is not selected
     

    Bad debt write off

    Dr

    		  

    68100

    SAL

    ADM
     

    Default VAT output

    Dr

    1.75

    26100

    ADM

    ADM
     

    Debtors control

    car

    		  

    14100

    ADM

    ADM
     
    If cost centre breakdown is selected
     

    Bad debt write off

    Dr

    10.00

    68100

    SAL

    ADM
     

    Default VAT output

    Dr

    		  

    26100

    SAL

    ADM
     

    Debtors control

    Cr

    11.75

    14100

    SAL

    ADM

    Note: The nominal accounts specified must exist in the Nominal Ledger to prevent postings to suspense.

    Cost centre breakdown is activated by selecting the setting Split postings between cost centres for balance sheet accounts on the Operational settings tab in Accounting System Manager.

  4. Enter the Transaction Analysis code if required.

    5. Note: This must have been enabled in the Sales Ledger settings Options tab in Accounting System Manager.

  5. Accept or amend the Maximum value of the entry to write off.

    6. Qualifying Transactions are displayed for you to select from. If the number of these is too large to be processed efficiently, you are prompted to reduce the maximum value to write off.

  6. From the generated list, select the Transactions that you want to write off, using the check box at the left hand side of each transaction.
  7. If the entry is part paid and includes VAT, enter the VAT value to be written off in the VAT column.
  8. Click Write Off to confirm selection of write offs.
See also

Other tasks

Write off customer account

Reference

Set up operational settings

Options (SL Settings)

Set up additional transaction settings