Example: Invoice Match with Write-Off (Type Input Codes 10 and 15)

If the payment that you receive is not enough to satisfy the open amount of the invoice, or if you receive a small overpayment, you might want to write off the difference and close the invoice. For example, you might receive a payment from a tenant that is slightly less than the invoice amount. To maintain a good relationship with the tenant, you might write off the minor amount instead of creating a chargeback invoice for the difference or leaving the amount open.

This table describes the two options for performing write-offs:

Option	Description
Automatic write-off (Type Input Code 10)	The system calculates the difference between the payment amount and the open amount of the invoice. If the difference is within the tolerance limits that are defined in the processing options, the system automatically performs the write-off. For example, assume that you establish the maximum write-off amount as 10.00 and the invoice open amount is 500.00, and you enter a receipt for 490.00. The system automatically writes off 10.00, if you either enter 490.00 in the Payment Amount field or accept the system default. You do not have to calculate or specify a write-off amount. Automatic write-offs require you to enter a default reason code in the processing options, which the system uses to determine the write-off (adjustment) account. When you enter the receipt, you cannot override the write-off reason code for automatic write-offs. When you apply the payment to invoices, the system displays a remaining open amount. After you enter the receipt and review it, the system displays the write-off amount and write-off reason code. You can override the write-off reason code at this time.
Manual write-off (Type Input Code 15)	Specify that the system performs a write-off by using type input code 15, in which case the system calculates the write-off amount for you. If you exceed the maximum manual write-off amount that is specified in the processing options, the system issues an error when you click OK. You can then manually adjust the write-off amount. You can set up a default reason code to use for manual write-offs, but this is not required, and you can override it when you enter the receipt.

Option

Description

Automatic write-off

(Type Input Code 10)

The system calculates the difference between the payment amount and the open amount of the invoice. If the difference is within the tolerance limits that are defined in the processing options, the system automatically performs the write-off.

For example, assume that you establish the maximum write-off amount as 10.00 and the invoice open amount is 500.00, and you enter a receipt for 490.00. The system automatically writes off 10.00, if you either enter 490.00 in the Payment Amount field or accept the system default. You do not have to calculate or specify a write-off amount.

Automatic write-offs require you to enter a default reason code in the processing options, which the system uses to determine the write-off (adjustment) account. When you enter the receipt, you cannot override the write-off reason code for automatic write-offs.

When you apply the payment to invoices, the system displays a remaining open amount. After you enter the receipt and review it, the system displays the write-off amount and write-off reason code. You can override the write-off reason code at this time.

Manual write-off

(Type Input Code 15)

Specify that the system performs a write-off by using type input code 15, in which case the system calculates the write-off amount for you. If you exceed the maximum manual write-off amount that is specified in the processing options, the system issues an error when you click OK. You can then manually adjust the write-off amount.

You can set up a default reason code to use for manual write-offs, but this is not required, and you can override it when you enter the receipt.

Regardless of the type input code that you use, if you specify a write-off amount and reason code, the system generates a write-off.

For the write-off to occur on amounts that exceed the invoice open amount, such as overpayments, you must override the transaction payment amount with the receipt amount. Otherwise, the system generates an unapplied receipt record for the amount. For example, if the payment amount is 100.00 and the invoice amount is 95.00, and you want to write off 5.00 automatically, you must change the payment amount in the detail area from 95.00 to 100.00. Otherwise, the system generates an unapplied receipt record 5.00.

After you enter receipts, you must post them. When you post payments with write-offs, in addition to crediting the bank account and debiting the AR trade account, the system updates a write-off account that you specify for the AAI item RAxx, where xx is the write-off (adjustment) reason code. You must set up an AAI for each write-off (adjustment) reason code that you use.