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This text refers to program version 4.3  

Receipts - Writing Off Small Amounts

This section does not apply to the simple conversion system. It does apply to the Dual-Base system and to the two systems in combination.

When entering a Receipt, the Invoice being paid can be treated as fully paid, even if the amount received is slightly different to that which is outstanding, providing that the difference is within an allowable margin. The difference is posted to a Round Off or Write Off Account, and thus effectively is written off. In line with EMU requirements, different Round Off and Write Off Accounts can be used, depending on whether the Currency is a member of the EMU. The allowable margin can be specified separately for each Currency.

In the example illustrated below, the Write Off Limit for Euros is 0.50, specified in the Automatic Write Off field in the Currency record for the Euro. A cheque is received underpaying an Invoice by 0.35. Specify the Invoice Number in the Receipt as normal, and change the value in the Received Value field to the cheque amount, again as normal. When you approve the Receipt, the 0.35 is written off (posted to a write-off Account) and the Invoice is treated as fully paid. If the cheque had underpaid the Invoice by 0.65, that amount would have remained outstanding. The Write Off Account and the amount written off (expressed in the Received Currency, Base Currency 2 in this example) are shown in the Roundoff Account and Roundoff fields on flip E of the Receipt. These fields are for information only and can't be modified.

This is flip B of the resulting Nominal Ledger Transaction, showing the amount written off expressed in both Base Currencies:

The Write Off Account is the EMU Rate Write Off Account, one of four Accounts set on the 'Exchange Rate' card of the Account Usage S/L setting. The Write Off Account is chosen from these four Accounts depending on the circumstance as follows:

Write Off Account

used when the Received Currency is the same as the Invoice Currency, and it is not a member of the EMU;

Rate Round Off Account

used when the Received Currency is different to the Invoice Currency, and the Received Currency is not a member of the EMU;

EMU Rate Round Off Account

used when the Received Currency is different to the Invoice Currency, and the Received Currency is a member of the EMU;

EMU Rate Write Off Account

used when the Received Currency is the same as the Invoice Currency, and it is a member of the EMU.

Note that once you have set Automatic Write Off and Round Off Limits in each Currency and have chosen the four Write Off and Round Off Accounts as described above, the process of writing off small amounts is completely automatic. When you receive a cheque whose value is different to the outstanding amount, all you need do is change the Received Value in the Receipt. Processing from then on is automatic: if the difference between the cheque value and the amount outstanding is small, it will be written off; if it is larger, it will remain outstanding.

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