AR WO - AR Write-Offs Process - Quick Start

Overview

The receivable write-off object and related functionality is one of the many receivable management tools available to organizations. More specifically, the AR Write-off object is the recommended vehicle for use when the organization wishes to clear unpaid receivable balances while recognizing a bad-debt expense (non-agreed recovery).

AR Write-Off Process

Access

From the AR Inquiry search results form, right-click on the invoice to be written-off and select AR Write-off to launch the “AR Write-off Properties” form.

Alternatively, from the accounting task-bar section – press on AR Write-off to launch the “Show AR Write-off” form. Right-click and press NEW to select or search for the invoice to be written-off.

The system will launch the Write-off Reason form. It is mandatory for the user to select a reason from the list in order to proceed with the AR write-off.

The AR Write-Off Properties

Review the default settings on every tab and complete required modifications to ensure desired outcomes.

The request for the AR Write-off opens on the Details tab pre-populated with the relevant information.

Details Tab – Confirm the requested for member and the AR write-off date. Unless making a correction, it is considered best practice to use the current date as the AR Write-off transaction date.

Totals Tab – Confirm the balance to be written-off. Press on the disbursements sub-tab to select the disbursements to be written-off

• The balance does not equal the amount written-off. Click on the Disbursements sub tab to include them.

• Uncheck members to exclude from the write-off. This will reduce the fees amount limit to write-off.

Once checked, the disbursements are part of the total write-off for the balance remaining.

Points to consider

If the invoice to be written-off is an invoice created in Acumin, then the Auto tax calculation will be enabled to facilitate the creation of the AR Write-off.

If the invoice to be written-off is a converted invoice (not created in Acumin) then the limits in distribution and the calculation of tax to be written off must be completed manually by the user. Please note that increased flexibility requires greater caution when completing the AR Write-off properties form.

Best Practice:

Ensure that the correct members and disbursements are checked ON before proceeding.

It is not possible to create an AR Write-off request if there are pending receivable related unposted objects associated to the same invoice. More specifically, the user will not be able to generate an AR Write-off request when one of the following items remains in progress:

• The affected invoice itself not yet posted or;

• There is at least one unposted payment, credit note, or AR Write-off for the affected invoice.

The user will receive a warning message indicating the un-posted object.

Printing the Result

Once the request is complete, if the user is not authorized to process and post the AR Write- off, he or she will typically execute the word merge function by proceeding with the print function and e-mail or print the request for the person responsible to process and post it.

The user can decide to include the signature and/or the Reason selected at the beginning on the document.

Press on the Print button to generate the Word document.

Modifying Default AR Write-Off Values

Although it is not considered best practice to execute partial AR Write-offs – a process best served through a credit note as this reflect a fee or disbursement reduction process reflective of the accounting transaction; it is possible to specifically select members and or disbursements through the write-off process.

Writing-off fees:

• Check/Uncheck the checkbox beside any member to determine the AR Write-off limit to write-off.

• On the totals fee section modify the fees to be written-off. Users can modify the value to an amount equal to or less than the limit.

Writing-off Disbursements:

• To access the list of potential disbursements to be written-off, the user must select the disbursements tab:

• Uncheck the disbursements to exclude from the write-off.

• On the totals disbursement section modify the disbursements to be written-off. Users can modify the value to an amount equal to or less than the limit. In this example the $50.00 write-off will be proportionately accounted for against the checked disbursement “Diazo Copies”.

Writing-off Sales Tax:

• If the invoice to be written-off was not created in Acumin (but converted) the user will not be able to use the “auto tax calculation” function.

• To manually write-off sales tax (because it is a converted invoice or because we are only writing off the sales tax as it was incorrectly charged), the user must ensure that the “auto tax calculation” checkbox is OFF in order to insert the amount to be written–off into the sales tax box:

• To access the tax field, click on the tax line of tax to be written-off. The cursor will then appear in the Credited cell of the row. Enter the tax amount to write-off and click on Apply or OK to confirm.

• If the Auto Tax Calculation option if ON, the user will have the option to override the Write-Off Total amont and the sales tax to be written of will be automatically recalculated.

AR Write-off Properties Form – Field Definition

Details Tab:

• AR Write Off for: This section displays the Client, Matter, Invoice Number and currency of the original receivable Invoice to be written-off.

• Signatory member: The member that requested the receivable write-off and presented on the printed document if requested.

• Write Off number: The receivable write-off number.

• Write Off Status: Status of current receivable write-off.

• Creation date: The receivable write-off’s date of creation (defaults to the current date at creation).

• Posting date: The receivable write-off’s posting date 12/30/1899 means no date. The date will only be stored once the transaction is posted.

• Write Off / GL date: The receivable write-off’s transaction date (equal to the date of GL the Operations). The user should confirm this date.

• Matter information: Selected Matter Information. Clicking on the Ellipsis Button will bring the user to the Matter Properties form.

• Responsible Teams: Lists the composition of roles at the client and matter levels.

Totals Tab:

• Invoice Information: Displays the Invoice Date, the Total Original Invoice Value and the Unpaid Balance. The unpaid balance is the limit of the receivable write-off.

• Fees / Disbursements: This section displays a summary of fees and disbursements included in the original invoice.

  • The Fees tab lists the value of fees invoiced of all Members that participated on the selected invoice. The amounts shown are the one billed to the client per member.

  • The Disbursements tab lists all the disbursements included in the original invoice summarized by code.

• Totals Section: This section displays the second limit, whereby the user cannot exceed this second limit between fees, disbursements and taxes to be credited. The written-off column allows the user to override the default values not to exceed the stated limit.

• If the Auto Tax Calculation is Checked ON: The tax value to be written-off will be automatically calculated based on taxable fees and/or disbursements included in the AR Write-Off.

Other Options Available:

• If the user does not have permission to post AR Write-Offs, the user will need to transfer electronically (Submit) the information to an authorized person (Submit to content).

• Click on the ellipsis button to select the submittee (if there is no default or the default is incorrect).

• Press submit to transfer the AR Write-Off for processing to the person populating the Submit to field.

• Ignore AR Write-off for collection purposes: This Option, if checked ON, will allow the user to generate the AR Write-Off and related GL Operations, yet the Invoice will be considered available for collections therefore it will be included in the client’s Reminder Statement as if the receivable write-off had not been executed.

• Undo will cancel all modifications made to the receivable write-off and return the content as it was when the receivable write-off was first generated.

• Print will open the Print Write-off form

AR Write-off GL Operations

The Post Button will execute the GL Operations and change the AR WO Status to Posted in the Show Write Off form:

Typically a receivable write-off will affect the Following GL Accounts:

The above displayed entry is just an example on how to write off an invoice that has Fees, Disbursements and Sales Tax.

Although the actual GL Operation will differ depending on what is being written off, it is important to note that a receivable write-off does not reduce the Billed Time GL Account (the revenue GL Account) but its own billed time written-off GL Account.

The GL transaction description will include:

• the client code and name,

• the matter code,

• the AR write-off number and,

• the member code of the signatory member selected in the AR write off.

AR Write-Off Cancellation Process

Access

From the accounting task-bar section – press on AR Write-off to launch the “Show AR Write-off” form.

Filter for the AR Write-Off to be cancelled, select and right-hand click / Cancel:

The user will be prompted with a confirmation message:

On acceptance the user will be asked to complete a reason for the cancellation and to accept the cancellation date:

The OK Button will execute the GL Operations and change the AR WO Status to Cancelled in the Show Write Off form:

On OK the cancellation will be completed:

RELATED DOCUMENTS:

Why does the Allocation in the AR Write-Off report differ from the member selected in the AR Write-off screen.

Ignore for collections purposes option on AR write-offs - Excluded from AR but included in collection process

Cancellation - Converted AR WO - Cancel option versus Best Practice Alternative