Manually Write Off Customer Payment Difference

Outcome

Payment differences are accepted written off and recorded. An accounting journal and a customer payment journal are printed. For write-offs on customer/payer level, a customer invoice journal is printed for the separate write-off invoice record that is created as well.

Review the write-offs in one of these ways:

• Create a column template in 'AR Inquiry Column Template. Open' (ARS066) with value type 65 (Write-offs using accounting option 20-99) included. Then you can use the template to review the total write-off amount for the customer in 'Accounts Receivable. Display Balances' (ARS200).

• For write-offs on customer level, review the internal credit invoice records per customer in (ARS200).

• For write-offs on invoice level, review the write-offs for specific invoices online in 'Customer Invoice. Display Separate' (ARS215) or print a list in 'Payment Received Register. Print' (ARS565).

Accounts receivable and the general ledger are updated. The transaction tables below are based on an example where you have a customer invoice of USD 1,000 but receive a payment of USD 800:

If the write-off is applied to a specific invoice, these account entries are created:

Accounting Rule	Account	Debit	Credit
*	Customer		800
	Bank	800
*	Customer (amount written off)		200
	Write-off (account specified in the accounting option used)	200

*Account entry based on the customer invoice.

If the write-off is applied to the customer instead, these account entries are created:

Accounting Rule	Account	Debit	Credit
*	Customer		1,000
	Bank	800
*	Customer (amount written off)		200
	Write-off (account specified in the accounting option used)	200
*	Customer	200

*Account entry based on the customer invoice.

The internal credit invoice record for the write-off that is created in this case is automatically offset.

Before you start

• The starting conditions listed in Adjusting Customer Payments must be met.
• Depending on your need of traceability and report preferences, select a preferred method for manual write-offs: On customer level or invoice level.
• Accounting options must be defined for manual write-offs in 'AR Accounting Option. Open' (ARS020). The 'Write-off method' field controls whether the option can be used on invoice level or customer level. Note that the 'Confirm with Enter' check box should be selected if you wish to review and change values in a separate panel before confirming the write-off.
• For write-offs applied on customer level, number series type 59, series B, must be defined for internal write-off invoices in 'Number Series. Open' (CRS165).
• Check that any payment tolerances defined in 'Payment Tolerance. Open' (ARS098) do not exceed the payment difference you wish to write off. These tolerances will otherwise write off the difference automatically using accounting rule AR30-185 for the posting.
• Note that the 'Split payment transactions' parameter in the detail record for the FAM function in 'FAM Function. Open Details' (CRS406/E) controls the number of transactions created for write-offs on customer level.

Follow These Steps

1. Enter a payment directly in 'Payment Received. Record' (ARS110/E), using 'Journal Entry & Payment. Open' (GLS110/B), or 'Payment Document. Enter' (ARS105).

2. On (ARS110/F), select a sorting order to identify the invoice records, when necessary:

   • 1 = Payer
   • 2 = Customer
   • 3 = Invoice number
   • 4 = Quick entry
   • 5 = Group invoice
   • 6 = Payer, sorted by due date.

3. Select one of these alternatives:

   • Method 1: create a write-off applied to a specific invoice
   • Method 2: create a general write-off applied to a specific customer.

Method 1: Apply Write-off to Specific Invoice

1. On (ARS110/F), select option 11 = 'Partial payment' for the invoice to which the payment should be allocated.

2. On the H panel, enter the amount received in the 'Partial payment amount' field. Press Enter.

3. Back to the F panel, select the user-defined accounting option for customer write-offs for the invoice.

   The options are listed by pressing F4 in the field to the right of the exchange rate in the header.

4. On the G panel, review and change the proposed values, when necessary: Accounting string, amount, VAT code, quantity, voucher text. Press Enter to return to the F panel, where the invoice is displayed as fully paid.

5. Continue to Finish Write-off.

Method 2: Create General Write-off Related to Customer

1. Select option 1 = 'Full payment' for the invoice(s) to which the payment should be allocated.

   The invoiced amount is reduced by the amount entered and recorded according to the pre-defined accounting option. The remaining payment difference is displayed in the header.

2. Enter the user-defined accounting option for manual write-offs in the field to the right of the exchange rate in the head of the panel.

3. On the G panel, review and change the proposed values, when necessary: Accounting string, amount, VAT code, quantity, voucher text. Press Enter to return to the F panel.

Finish Write-off

1. Repeat the steps above until the entire total to be processed is allocated and adjusted.

2. To end, press F3 to assign a voucher number to the voucher.