Receipt write off functionality is provided to account for small overpayments that you do not intend to refund or maintain as unapplied amounts or On account balance. You can write off unapplied cash receipt balances.
With this functionality you can choose to write off an unapplied cash receipt amount within certain limits to a specific general ledger account. The write off amount is credited to this account such as miscellaneous revenue account, and no longer reflected as an unapplied amount on the receipt or on the customer account.Receipt write offs do not change receipt amounts nor do they affect customer balances or general ledger cash account entries. Receipt write offs can be processed for cash receipts only.Please Note: You cannot write off amounts from miscellaneous receipts.
You can write off individual unapplied receipt amounts during receipt application or later, or any time using the application window. You can also write off balances of multiple receipts in mass using the create receipt write off option.
Receipt Write-off Setups:The following information must be set up before you can process any receipt write-offs:
Receipts write off receivable activity --> Navigation: Setup – Receipts – Receivable Activities.Define one or more receivable activities with an activity type of Receipt Write off. Each time an unapplied receipt amount is written off, a receipt write off type receivable activity must be selected. For Receipt write off receivable activities the GL Account source must be specified as Activity GL Account. Select valid general ledger account number as the Activity GL Account. This account will be credited for the receipt write off amount. This account may represent a miscellaneous revenue account or expense account.
Receipt Write off user approval limits --> Navigation: Setup/Transaction/Approval LimitsDefine approval limit ranges for document type Receipt write off for all users who will be allowed to write off unapplied receipt amounts. When you write off an unapplied receipt amount, Receivable uses approval limits that have a document type of Receipt Write off. You cannot write off an unapplied receipt amount that is outside your approval limit or outside the system Maximum Write off amount. You can only write off positive amounts; therefore Receipt write off from amount limits cannot be less than zero.
System Level Maximum --> Navigation: Setup>System>System Options (T) MiscellaneousDefine the system level maximum write off amount for a single receipt in your functional currency. No users can write off unapplied receipt amounts that are greater than the system maximum even if their user limits allow it. Therefore the system maximum overrides user approval limits when necessary user allows it. There fore the system maximum overrides user approval limits when necessary.
How to Manually Write off Receipt Amounts? --> NavigationReceipts- Receipts or Receipt- BatchesThe manual receipt write off process gives you the flexibility to write off unapplied amounts when you enter and apply a receipt or later any time. You can enter multiple receipt write off lines in the Application window for a single receipt provided that the total write off amounts for the receipt does not exceed your receipt write off user approval limits or the system maximum write off user approval limit or the system maximum write off amount.Please Note: When you write off an unapplied amount on a foreign currency receipt, Receivables uses the same exchange rate information from the original receipt for the write-off application record. If you adjust the exchange rate of a foreign currency receipt, Receivables reverses the write-off with the original exchange rate and then applies the new exchange rate to a new write-off application record. Receivables completes this process only if the converted amount does not exceed the user approval limit for receipt write-offs or the system Maximum Write-off Amount. If the converted amount exceeds either of these limits, then the write-off amount is left as an unapplied amount.
Enter a new cash receipt or query an existing cash receipt. Choose application button. (You cannot process receipt write offs using the Mass apply button)Verify that the unapplied amount for the receipt is greater than zero.In the Apply To field, select Receipt Write-off.In the Amount Applied field (you may have to scroll to the right to see this field), enter the unapplied amount tobe written off. (Receivables validates the value you enter is less than or equal to the unapplied amount for thereceipt, is within your user write-off approval limit, and does not exceed the system Maximum Write-off Amount.)In the Activity field, select a Receipt Write-off type receivables activity.Save your work. The unapplied amount on the receipt should now be reduced by the write-off amount.
How to Write off Receipt Amounts in Mass?The automatic receipt write-off process gives you the ability to write-off multiple small unapplied receipt amountswith minimal manual intervention to individual receipt records. Unapplied amounts can be written-off based onamount or by percentage. When you submit the Automatic Receipt Write-off request, a concurrent program creates the write-off records.Please Note: Always use the Generate Report Only option to preview the receipt amounts you want to write off before submitting the update. You can only reverse write-off receipt amounts by manually unapplying each receipt writeoff from the Applications window.
Creating an automatic write-off --> Navigation: Create Receipt write off windowControl- >create receipt write offIn the Selection region, enter the currency of the receipts to write off. Receivables considers receipt amounts for write off only if they are in the same currency as entered here. The default value is your functional currency if the user write-off approval limit has been defined for the functional currency. You can change the default value to another currency.Enter either an unapplied amount or unapplied amount percentage, or both. Although you can enter anyamounts in these fields, Receivables will not select unapplied receipt amounts for write-off if they exceed the user write-off approval limits or system Maximum Write-off Amount.- If you enter an unapplied amount, Receivables selects unapplied receipt amounts that are less than or equal to this value and that meet the other selection criteria.- If you enter an unapplied percentage, Receivables determines the percentages of each unapplied receiptamount by dividing the unapplied amount by the original receipt amount and then selects unapplied receiptamounts that are a percentage smaller than or equal to the percentage entered and that meet the otherselection criteria.- If you enter both an unapplied amount and unapplied percentage, then each unapplied receipt amount mustmeet both the amount and percentage criteria.
WARNING: When date criteria is used, the logic of this program is to select only those receipts that have receipt dates within both the receipt date range and receipt general ledger date range specified.Specify a receipt general ledger date range, if desired.
Please exercise caution when setting receipt general ledger date ranges. When date criteria is used,the logic of this program is to select only those receipts that have receipt dates within both the receipt date range and receipt general ledger date range specified.Specify a payment method, if desired.Specify an individual customer name, if desired. Specify an individual customer number, if desired.Specify an individual receipt number, if desired.In the Parameters Region, select a Receipt Write-off receivable activity. This field is optional when submitting the report and required when creating the write-offs.Enter the apply date. This date is used as the apply date of the write-off application records. Enter the GL Date. This date is used as the GL date of the write-off application records.Enter comments, if desired. These comments are assigned to each write-off application record and can be viewed from the Applications window.In the Options region, select one of the following options:Generate Report Only: produces the Write-off Unapplied Receipt Balances: Pre Write-off Report, which lists the unapplied receipt amounts selected based on your criteria. Use this option to preview the write-off results before running the option to create write-off amounts in mass.- Create Write-off: submits the Automatic Receipt Write-off program (ARWRTCON ) that creates the write-offapplication records and generates the Write-off Unapplied Receipt Balances: Write-off Report that lists the unapplied receipt amounts selected based on your criteria.WARNING: Oracle highly recommends that you always use the Generate Report Only option first before submitting the update. There is no supported means for reversing receipt write-offs in mass. You can only reverse write-off receipt amounts by manually unapplying each receipt write-off from the Applications window. Choose the Submit button.Reversing Receipt Write-offs like other payment applications, receipt write-off amounts can be reversed at any time and the write-off amount will be added to the Unapplied total for the receipt. To reverse a receipt write-off, unapply the original write-off application by unchecking the Apply check box on the Applications window for the write-off amount.Navigate to the Receipts window (Receipts>Receipts or Receipts>Batches).Query the existing cash receipt.Choose the Applications button. Uncheck the Apply box next to the receipt write-off application line you want to reverse.Confirm that the write-off amount is added to the Unapplied total for the receipt.Apply the unapplied amount, if desired.Save your work.
Viewing Receipt Write-offs: Receipt write-off amounts are displayed with other receipt application lines. You can review the applications for a receipt by querying the receipt from the Receipts or Receipts Summary options and then selecting the Applications button. You can also drill down to receipt application information from the Account Details option by querying the receipt number as the Transaction number, then selecting the Activities button.Please Note: At this time, receipt write-off amounts cannot be viewed from the Receipts form, Application Summary tabbed region. Receipt write-off application lines are omitted from this screen.The accounting for receipt write-off amounts is included with the accounting for the receipt.
To review receipt write-off information --> Navigation: Receipts – Receipts or Receipts – Receipts Summary.Query the receipt to view. If you are in the Receipts window, choose the Applications button. If you are in the Receipts Summary window,choose Open, then choose the Applications button.View the receipt write-off line(s) and amounts. If you want to view accounting information for receipt write-offs, close the Applications window to return to the Receipts window.Choose View Accounting from the Tools Menu. View the detail accounting lines for the receipt in the form of a balanced accounting entry. The receipt write-off amounts display as credits with a line type of ‘Other Receipt Application’ for the account that was defined for the Receipt Write-off receivable activity selected. You should also see that the write-off amount was initially included in the Unapplied line type amounts.If you want to view the detail accounting as t-accounts, select the T Accounts button.Accounting for Receipt Write-offs As a cash receipt is entered, general ledger entries are created for each step in the process. Therefore, to explain the entries for a receipt write-off, you need to first understand the entries for receipts in general.If a receipt is initially saved as unidentified (a customer is not selected), then the following entries are made:
DR Cash
CR Unidentified
However, most cash receipts are not saved before the customer is identified; therefore the following entries aretypically the initial accounting entries created for a receipt:
DR Cash
CR Unapplied
As you apply the receipt, entries are made to move the money from Unapplied to Applied (Receivable). For example, if a $100 receipt is entered and applied in full, the following entries are made:
DR Cash 100
CR Unapplied 100
DR Unapplied 100
CR Receivable 100
When a receipt write-off is processed, the money is moved from Unapplied and put to the account defined for theReceipt Write-off receivable activity selected.For example, if a $100 receipt is entered and $95 is applied and $5 is written off, then the following entries are made:
DR Cash 100
CR Unapplied 100
DR Unapplied 95
CR Receivable 95
DR Unapplied 5
CR Write-off 5
If you later decide to reverse the write-off, then the following additional entries are made:
DR Write-off 5
CR Unapplied 5
DR Cash
CR Unidentified
However, most cash receipts are not saved before the customer is identified; therefore the following entries aretypically the initial accounting entries created for a receipt:
DR Cash
CR Unapplied
As you apply the receipt, entries are made to move the money from Unapplied to Applied (Receivable). For example, if a $100 receipt is entered and applied in full, the following entries are made:
DR Cash 100
CR Unapplied 100
DR Unapplied 100
CR Receivable 100
When a receipt write-off is processed, the money is moved from Unapplied and put to the account defined for theReceipt Write-off receivable activity selected.For example, if a $100 receipt is entered and $95 is applied and $5 is written off, then the following entries are made:
DR Cash 100
CR Unapplied 100
DR Unapplied 95
CR Receivable 95
DR Unapplied 5
CR Write-off 5
If you later decide to reverse the write-off, then the following additional entries are made:
DR Write-off 5
CR Unapplied 5
FRIDAY, 18 JUNE 2010 19:31
Posted by Feroz Mohammed
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