FAQ: How do we clean up accounts? (Bad Debt / Write Off, etc. )

What is the process for cleaning up my accounts receivable, as in writing off the debts to clean up old errors or clear balances?

Create a customer item “write off” – You may want to create a financial account for this, check with your accountant.

Then create a credit to remove the balance owing.

Step 1: Create an Expense account.

1. Go to the left menu > Setup
2. Accounting
3. Accounts
4. Expense
   • Leave all fields as displayed other than
   • Number = Enter your account number for this Write Off Account
   • Name = Enter the name of this account (example: “Bad Debt – Uncollectible Fees”)
   • SAVE
   • To add sub accounts (multiple locations):
     • De-select the Posting checkmark
     • Click the “+ Add Sub Accounts”

Step 2: Create a Write Off Item

1. Go to the left menu > Setup
2. Accoutning
3. Item
4. Click “+ Add Customer Item”
   • Name = Write Off
   • Description = Write Off
   • Group = childcare
   • Tax Receipt Item Type = Fee Reduction (this will subtract the fees applied to the child, as well as adjust the Tax Receipt accordingly)
   • Account = The Expense account created (Example: 5100 Write Off – Uncollectible Fees)
   • Tax Group = Non-Taxable
   • Active = checkmark
5. Under Prices, Click the “+ Add Item Price”
   • Price = $0.00
   • Start Date = Select Date
   • End Date = Select Date or leave as default 9999
   • Click the checkmark to apply
   • Click the SAVE icon to save all

Step 3: Create a manual credit to the contact with the bad debt/ etc.

1. Go to the left menu > Accounts Receivable
2. Billing
3. Manual Credit
   • Customer = Contact Name with bad debt
   • Branch = Associated Branch for Contact
   • Reference Contact = Contact’s child
   • Tax Group = Non-Taxable
   • Date = Date you wish to record
   • Reference Date = Reference Date
   • Reference = Note displayed on the statement
   • Lines:
     • Click the “+”
     • Select the Write Off Item
     • Account = Associated Account (Expense Account created)
     • Branch = Associated Branch
     • Description = Write Off (auto-populate)
     • Quantity = Can be overridden
     • Unit Price = Enter the price for the bad debt/ write off > tab off
     • Review > Click the checkmark to apply
   • Review all information entered
   • Click the POST icon to complete

Reports for reference:

• Account Activities (All)
  • Displays activities for the Accounts > Locate the new Account created (example: 5100 Write Off – Uncollectible Fees)
  • To access:
    • Go to the left menu > Reports
    • Accounting
    • Billing
    • Account Activities (All)

• Contact Ledger
  • Displays the Contact’s account balance.
  • To access:
    • Go to the left menu > Reports
    • Accounting
    • Billing
    • Contact Ledger