Writing off Bad Debts

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Writing off Bad Debts

To write off a bad debt, you process a credit journal for the debtor in the Distribution system. When the credit journal is posted, the debtor's outstanding account balance reduces and the journal amount is written to the GL account for Bad Debts.

To process a credit journal:

Select DEBTORS | DEBTORS TRANSACTION PROCESSING | JOURNALS.
Either select an existing journals batch or create a new batch.

Micronet displays the Debtors Journals screen.

Select the Debtors Number and a Posting Date.
Enter a Description of the journal and the Total Pay Amount (the amount to be written off).
Select Credit in the Credit/Debit field.
In the Post GST Adjustment field, select Yes to claim an adjustment on your GST Collected.

Warning

Your selection at Post GST Adjustment determines whether a transaction should be updated to the GST file.

If adjusting for an EXPORT sale customer, select Yes. The transaction is reportable even though the GST is zero and should appear in the GST Free column of the GST Report - GST Payable in the General Ledger.

Select Accept.

For Open Item debtors, Micronet displays the Debtors Journals - Open Item screen.

Double click on the invoice you want to write off as a bad debt.

Micronet displays the Enter Journal Amount screen.

Either:

accept the amount displayed in the Journal Amount field (the balance remaining to be allocated)
manually enter the portion of the total journal amount you want to allocate against the invoice
select the Jrl All button to allocate the maximum amount available to the transaction.

Select Accept.

Micronet redisplays the Debtors Journals - Open Item screen and updates the Posted field.

Repeat the previous steps, if required, until you have allocated the total journal amount (i.e. This Pay should equal Posted).

Select the Accept button.

Micronet displays the Dissect Debtors Posting screen.

Select the Add button to display the Enter GL Dissection screen.
In the Account Code field, select a GL account for the adjustment, i.e. the Bad Debts account.
Set the BAS Type according to the warning below.

Warning

If you selected Yes at Post GST Adjustment on the Debtors Journals screen and confirmed a GST amount, the BAS Flag MUST be set to Sales (G1) to comply with BAS Rule 1.

If you selected Yes at Post GST Adjustment and confirmed a GST amount of zero for an export sales customer, the BAS Flag MUST be set to Sales To Exports (G2).

If you selected No at Post GST Adjustment, the BAS Flag MUST be set to No BAS as you have determined the adjustment or journal is not reportable and should not update to the GST file.

Select Accept to return to the Dissect Debtors Posting screen.

Select Ok to post the journal.

Micronet immediately updates the debtors account balance and writes the amount to the Bad Debts account. It then redisplays the Debtors Journals screen where you can enter another journal into the batch if required.