Exercise - Create a write-off journal for a customer
In this exercise, you will set up the write-off parameters and write off a customer balance from the Aged balances page.
Set up the write-off parameters
- Go to Credit and Collections > Setup > Credit and collections parameters.
- Select the Collections tab.
- Expand or collapse the Write-off section.
- The Write-off journal is the general journal that will hold the write-off transactions that you create. You can attach a reason code to every write-off. The write-off account will be used as the expense account or reserve adjustment in the general journal.
- You can override this default at the time of the write-off. Set the Separate sales tax field to Yes if you want to separate the sales tax from the original transaction in the write-off.
- Close the page.
Write off a customer balance from the aged balances page
- Go to Credit and collections > Collections > Aged balances.
- Select the row for the customer that you want to write off. For example, select the line with Birch Company on it.
- On the Action Pane, select Collect.
- Select Write off.
- Select OK.
- Close the page.
- Go to General ledger > Journal entries > General journals.
- Select the journal batch number for the journal that contains your write-off.
- Note that one line is created to reverse the customer balance. One or more lines are created to post the write-off to the write-off account.
- Close all pages.