Our next series of posts will elaborate on some of the ways one can use the Sage 100 ERP Cash Receipts Entry function to clean up your A/R aging and customer history. Cash Receipts Entry can be used for more than just entering and recording payments. It can also be used to clear up uncollected amounts – whether simply a small amount due to clerical error, or writing off an entire invoice as a bad debt. And if a customer’s check is returned for non-sufficient funds (NSF), you can use cash receipts to put the balance back into the account. In Part 1, we address writing off bad debts.
If you have determined that a customer is never going to pay an invoice or balance, here is how you can remove the amount from your books:
- In Sage 100 ERP, navigate to Accounts Receivable > Main > Cash Receipts Entry
- Create a new deposit batch with a cash deposit amount of zero.
- Select the customer whose invoice(s) you are writing off.
- For check number, enter WRITE OFF
- Click on the Lines tab and click on the Select Invoices for Payment icon. Choose the invoice to be written off and click Accept. A cash receipts line is created for the invoice with a zero amount posted.
- In the Amount Posted field, enter the amount of the invoice being written off. You can write off the balance of the invoice or a partial amount if you have negotiated a partial payment with the customer.
- On the second cash receipts entry line, select the line type GL Account in the window under the grid. Select the G/L account used for returns and allowances (or Bad Debt). Notice that when you tab out of the field, the system automatically populates the amount posted field with a negative amount equal to the amount on the prior line.
- The total amount for the deposit will now be zero. Click Accept.
- Print and update the Cash Receipts Register and Daily Transaction Register.
You have now successfully written off a bad debt in Sage 100 ERP. Our next post will deal with writing off the balance on a short-paid invoice.