Write off a customer account

Find this screen

Open: Customers > Credit Control > Write Off Customer.

How to

Write off an account

1. Select the customer account using the Code, Postcode, or Short Name drop-down lists.

2. Enter the amount that you want to write off in the Goods value field.

   The remaining account balance is written off as VAT and shown in the VAT value box.

   If you don't want to include a VAT element, enter the full account balance here.

3. Choose the nominal account to post the VAT element of the write off to.

   Your VAT Output default nominal account is selected by default.

4. If required, select a Transaction Analysis code for the write off transaction.

5. Click Write Off.

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Useful info

When to write off a customer account

This writes off the entire debt on a customer account and set its balance to zero. This is something you'd normally only want to do when you have ceased trading with the customer. You would do this:

• After you have written off individual invoices and reclaimed the VAT paid on them.
• If you do not want to reclaim the VAT on the outstanding invoices.
• If there is no VAT to reclaim on the outstanding invoices.

Tip: Once you've written off the account balance, if you want to make sure that no further transactions are posted to this customer account, put the account On Hold using the Amend Account Status screen.

Dealing with bad debts and VAT

If you've paid the VAT on any outstanding invoices on a customer's account, you can reclaim the VAT paid as long as the debt is more than 6 months old. If you want to do this, you'll need to write off those individual invoices before you write off the customer account.

You do this using the Write off Bad Debt screen. Using this process creates a credit note which Sage 200 allocates to the invoices you're writing off and also appears on your VAT Return.

See Dealing with customer bad debt.

If you don't want to reclaim the VAT on the outstanding balance, but do want to reduce the balance of your VAT nominal account on the balance sheet, you choose how much of the outstanding balance is VAT and how much is goods and enter these values here

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What happens when

An account is written off?

• A credit note is with a reference of ACCWRTOFF is created and posted to the following nominal accounts:

  Nominal Account	Debit	Credit
  Debtors Control (Balance sheet)		Account balance
  VAT output (Balance sheet)	Remaining balance (VAT amount)
  Bad Debt Write Off (Profit and Loss)	Goods (Net) Value

  Note:

  If you have specified a cost centre and department for the default sales nominal account on your customer 's account, you must create a nominal account for bad debts with the same cost centre and department.

  For example, if a customer has a default salesaccount of 4000 MAN, the transaction is posted to the Bad Debt Expense account 9101 MAN on the P & L. If there is no bad debt nominal account with the relevant CC or CC / Dept combination, then this is posted to the suspense account.

• The credit note is allocated to the invoice.
• The customer's account balance is updated.

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Next steps

To ensure that no further transactions are posted to the customer account, put the account On Hold.