Writing Off Bills Will Create Write-Off Adjustments And Possibly A Match Event

Most overdue process templates will be configured to contain an event that writes-off the unpaid balance of bills.

Note:

Processing is redirected to another algorithm. The base-package overdue event activation algorithm that writes off bills simply redirects the call to the Write-Off Bill algorithm plugged in on the account's Collection Class Overdue Rules. The reason for this redirection is because users can manually write-off a bill (using Bill - Main) and when they do this, we want to invoke the same logic as when an overdue process writes-off a bill.

The base-package Collection Class Overdue Rules - Write-Off Bill algorithm determines the amount that should be written off for each distribution code on each unpaid financial transaction. It then creates a separate adjustment for each service agreement where the lines on the adjustment contain the amount to be written off for each distribution code. If the unpaid financial transactions are not linked to a match event, the write-off adjustments plus the unpaid financial transactions will be linked to a new match event. If the unpaid financial transactions were linked to an unbalanced match event, the write-off adjustments will be added to the existing match event (thus making it balanced).

If partial payments were made against a bill, the amount written off will be prorated in light of the partial payments. For example, if 20% of a bill had been paid, 80% of each distribution code will be written off.

For example, assume the original bill's FT looked as follows (note, if the bill has multiple service agreements this will need to be done for each SA's FT's):

  • Debit A/R $110.00
  • Credit Flat Charge Revenue ($50)
  • Credit Usage Revenue ($50)
  • Credit City Tax Payable ($5)
  • Credit State Tax Payable ($5)

Assume the customer had made a partial payment of $11 and it was matched to this FT. At write-off time, the system will create an adjustment whose adjustment lines will cause each distribution code to be written off by 90% (100% - $11 / $110). For example:

  • Debit Flat Charge Revenue (or some W/O Expense) $45
  • Debit Usage Revenue $45
  • Debit City Tax Payable $4.50
  • Debit State Tax Payable $4.50
  • Credit A/R $99

This adjustment will then be linked to the original match event on which the payment was linked (thus making it Balanced ).

Note:

Log entry. The base-package overdue event activation algorithm that writes off bills inserts a row into the overdue process's log for each bill written off.