MAS 500 ERP Tips and Tricks

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In this post we will review the steps required to process write offs in accounts receivable and accounts payable. We will also explain how a closeout transaction is created in work order transaction inquiry

Tip #1 – How To Process Write Offs In Accounts Receivable And Accounts Payable

In this tip we explain how to write off both Accounts Receivable amounts that you will not be collecting from customers, and Accounts Payable amounts that you will not be paying vendors.

Process Accounts Receivable Write Off

  1. First, verify that your setup options are correctly configured for processing write-offs. In Accounts Receivable setup, enter an amount in Maximum Write Off Amount on the Other tab of Set Up AR Options. You also must select the Allow Write Offs option for the customers on the Defaults tab in Maintain Customers. This option also can be specified in Maintain Customer Classes for new customers employing the class.
  2. To process a write off, create a new batch in Process Cash Receipts and select Enter Cash Receipts.
  3. Select the Customer and enter a Payment Reference.
  4. Enter the amount being paid or $0 if only processing a write off.
  5. Choose the appropriate Payment Method. If you are processing a write off for the entire invoice, select the Other tab and choose Cash as the Payment Method. Select the Application tab.
  6. Choose the appropriate invoice in the invoice grid. This will fill in the Payment Applied with the amount of the payment. The Amount Remaining will contain the balance of the invoice. To write off this amount, select the write off option next to this field. Note: This function only is enabled if the amount is less than the maximum configured in Set Up AR Options.
  7. Select OK to save the cash receipt. If you are writing-off the entire amount, after selecting the invoice, simply select the write-off option, click OK, then save the cash receipt. Post the batch. The write-off account used is the one associated with customer class assigned to the invoice. If you use Account overrides, they will apply.

Process Accounts Payable Write Off

  1. First, verify that you have filled in an amount in Maximum Write Off Limit on the Main tab of Set Up AP Options.
  2. Create a new batch in Process Invoices for Payment or Process Manual Checks.
  3. Select Enter Payment or Enter Checks.
  4. Choose the Vendor and enter or select the Payment Reference. Enter the amount being paid or $0 and select the Detail tab.
  5. Choose the appropriate voucher from the grid. Enter the Payment amount. The New Balance will calculate the balance of the voucher. To write off this amount, select the write-off option next to this field. This function only is enabled if the amount if less than the maximum configured in Set Up AP Options.
  6. Select OK save the payment. If you are writing-off the entire amount, after selecting the voucher, simply select the write-off option, click OK, then save the payment. Post the batch. The write-off account used is the one associated with vendor class assigned to the voucher. Overrides do apply.

(Tip #2) How A Closeout Transaction Is Created In Work Order Transaction Inquiry

A Closeout transaction is created when you close a work order with leftover costs in WIP. In other words, not everything issued has been progressed, and total fields are not equal to the sum of the update fields. Leftover costs in WIP occur when entering a work order transaction against the progress step as follows:

  • Progressing standard-cost items at a cost other than the standard cost.
  • Progressing non-standard-cost items, and absorbing a negative cost tier, to get back to zero on-hand quantity. If the quantity on hand becomes positive, the positive-cost tier will accept the cost.
  • Partially progressing against a work order (for example, not progressing for the full quantity of the work order all at once) several times, with enough raw materials in WIP to cover the total quantity progressed, and not setting the Complete flag to Y on the Labor Entry screen for the final progress labor entry.

These scenarios leave cost in WIP when the work order is completed through the Work Order completion entry task. This results in a Closeout transaction which will post to the Manufacturing Variance accounts.