Dealing with Old A/R
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(Created page with '=Intro= There are some options in CMS for dealing with unpaid invoices that you have had difficulty collecting. Once you've sent many statements with no luck getting payment, you…')
(Created page with '=Intro= There are some options in CMS for dealing with unpaid invoices that you have had difficulty collecting. Once you've sent many statements with no luck getting payment, you…')
Current revision as of 00:40, 30 March 2017
Intro
There are some options in CMS for dealing with unpaid invoices that you have had difficulty collecting. Once you've sent many statements with no luck getting payment, you need to try other tactics (which may not involve CMS) and in the process you'll want to at least stop sending monthly statements and or open invoices (saving postage).
Stages
- Bad Debt - First stage often is to leave it as open A/R (meaning it still shows on A/R reporting) but flag it as Bad Debt to remove it from statement and open invoice printing. In other words, at this point you don't want to waste any more postage but you want to leave the balance on the customer record, typically because you think there is either still a chance to collect by other means or you're dealing with writing off bad A/R en masse at a later time. To do this, set the Bad Debt flag on the invoice under View Invoice>See Invoices>Options (no edit or save is required)
- Writing Off - At some point the uncollectable debt should be written off so it can be shown as a loss for tax purposes. To do this we recommend creating a user-defined payment method of a similar name and using that to pay off the balance on those invoices. This method of paying off those invoices allows for accounting to easily see how much A/R was written off in a period simply by looking at a payment report by pay type. Unlike Bad Debt which allows the invoices to still be included in A/R reporting, once it's paid off (write-off or otherwise) it will of course drop out of A/R.
If not done already, you should also consider setting the customer as .01 credit limit and/or the flag for Do Not Accept Orders, probably after flagging any invoice as Bad Debt. You don't want to errantly accept a new order from that customer until they've resolved old balances, particularly no orders that are not prepaid.
