There are a few approaches to writing off all or a portion of a customer balance. This information covers steps for using Discounts and a Pay Method.
Note: The Write-off Customer Balance utility is another method which can be used to write off a group of balances quickly and easily.
Setting Up Pay Methods
It is recommended to create a Payment Method named Write Off to be used when writing off a Customer’s balance, if one does not already exist. Set up the Pay Method at Accounting / Setup / A/R / Pay Methods. Choose Add Row and enter a name in the Pay Method such as Write Off and a Short and Long Description. Double-click in the Location column and select the General Ledger Account to which this Pay Method should post. If there are multiple Locations, a General Ledger Account must be chosen for each Location. Select OK to save.
Using Discounts
At A/R / Payments, select Add and choose the Customer.
On the Payment on Accounts window, enter zero dollars in the Payment Amount and enter the amount being written off in Discount Amount.
In Disc Acct, select the General Ledger Account to post this payment. The same dollar amount must also be added to the Discount column in the Invoice grid.
Select the Pay Method created for writing off balances and choose Save.
When running the Payment Register found at Accounting Reports / Accounts Receivable / A/R Status, the balance written off will be itemized at the top of the report. However, the Location Recap, G/L Recap, and Payment Method Recap do not reflect the Discount applied. To verify this information, it is recommended to run an Account Detail for the G/L Account used for the Disc Acct.
Using a Payment Method
At the Payment on Account window, enter the Payment Amount with the amount to be written off and select Write-off as the Pay Method.
The payment will post to the General Ledger Account designated when the Payment Method was set up. This simplifies the process since no amount must be entered in the Discount field or in the Invoice grid and the Discount Account does not have to be changed.
Pay Methods can be set up for any situation where the payment needs to always post to a specific General Ledger Account.
