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

QUESTION: What is the best practice recommendation to process a payment against an invoice with a converted AR Write-off?

RESPONSE:

The best practice recommendation to process a payment against an invoice written off prior to the conversion to Acumin, is through the use of a no-time invoice and a receipt allocation modification once the receipt is posted. The below details the process requirements for the best practice recommendation.

Best Practice Recommendation - No Time Invoice and Fee Receipt Reallocation:
The authorized user creates a "no-time" invoice for the value of the payment with the required mix of fees, for presentation only disbursements and sales taxes. The invoice should be dated with the current date. To avoid fee allocation duplication, the fees should be manually allocated to the firm "Lawyer" – a member for these types of transactions. This is because the original invoice would have resulted in a fee allocation to the allocated-to members on the invoice transaction date. Once the no-time invoice is posted and the payment is applied to it, the user must complete a manual override to the receipt allocation proportionately to how the AR Write-off was applied to the fees, disbursements, and sales tax, as well as to how the receipts allocated to fees, were distributed to the various members implicated at that tim.. This process aligns itself with Acumin functionality and does not inherit potentially conflicting business logic from the previous software which may not yield a desired outcome from a management reporting perspective.

Caution - Cancellation of a converted AR Write-Off:
Technically the application cannot cancel an AR Write -off in the traditional sense where it would handle the sales taxes and management reporting measures in the same way as if the invoice would have been written off in Acumin. For this reason, this option is not recommended. However, if used, the user must journalize the reversal of the sales taxes written-off into the correct GL accounts and ensure these are considered in the sales tax submission process. Even if the sales tax is correctly handled by journal entry, please note that this process will limit management reporting opportunities for the related receipt allocation transactions as well as create accounting and audit trail complexities (journalized sales tax distribution).