Write off customer account
- The balance on the customer's account is set to zero.
- The bad debt write off account is updated in the Nominal Ledger with the value written off.
- The VAT account is updated in the Nominal Ledger.
- The debtors control account is updated in the Nominal Ledger.
Note: The central VAT file is not updated.
You must have:
- Ensured the bad debt write off account is a valid posting type nominal account.
To write off an account
Open: Sales Ledger > Sales Accounts > Write Off Account.
- Display the customer account you want to write off.
- Enter the Goods value you want to write off. The ledger automatically calculates the VAT value for you.
- Select the Code of the nominal account you want to use to write off the VAT element of the balance.
- Enter the Transaction Analysis code if needed.
- To set the account balance to zero, click Write Off.
If you are using cost centre breakdown for balance sheet postings, you only need to specify the account number reference for the VAT write off account. The necessary cost centre and department codes are attached automatically from the account header record.
Note: You can choose to use cost centre breakdown in Accounting System Manager settings Operational settings tab.
If you are not using cost centre breakdown for balance sheet postings, you must specify the full nominal account for VAT write offs, including cost centre and department codes.
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): |
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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 |
|||
If you write off a customer account transaction for the following value (with the standard VAT rate set to 17.5%): |
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Net |
10000.00 |
|
||||
VAT |
1750.00 |
|
||||
Gross |
11750.00 |
|
||||
The nominal posting results will be as follows: |
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If cost centre breakdown is not selected |
||||||
Bad debt write off |
Dr |
10000.00 |
68100 |
SAL |
ADM |
|
Default VAT output |
Dr |
1750.00 |
26100 |
ADM |
ADM |
|
Debtors control |
Cr |
11750.00 |
14100 |
ADM |
ADM |
|
If cost centre breakdown is selected |
||||||
Bad debt write off |
Dr |
10000.00 |
68100 |
SAL |
ADM |
|
Default VAT output |
Dr |
1750.00 |
26100 |
SAL |
ADM |
|
Debtors control |
Cr |
11750.00 |
14100 |
SAL |
ADM |
|
Note: The nominal account codes specified must exist in the Nominal Ledger. |
Note: You must have selected to Allow additional transactional analysis in the Sales Ledger settings Options tab.
Other tasks
Reference