What do I mean when I say Transaction Write-Offs?
If a customer’s transaction is outstanding for a longest period and we have no clue as to if the customer is going to pay or not, we cannot trace the customer and now we want to write-off that transaction. This is also called as Bad Debts.
How to enter bad debts in Oracle Receivables?
As per Oracle Receivable’s standard functionality: There is no such term in Receivables as Bad Debts. Receivables suggests that we “adjust” the particular transaction. is type of write off that will address our Bad Debt scenario.
These are setup and transactions steps for creating and entering Bad Debt Adjustments
1. Create a Receivables Activity with Adjustment type, adjustment is called a receivable activity because it write offs the outstanding balance on customer.
2. Assign Approval Limit of user to write off amounts. Obviously we cannot let anyone just write off the outstanding balance so we have to define the user’s limit.
1. Query the transaction to write off
2. Adjust the transaction
Here are the details for Setups:
1. Select the for which the activity is being defined.
2. Enter the Activity like Bad Debts Adjustments or Uncollectible Adjustments
3. Enter the (Optional)
4. Select the as . Since it is defaulted for a new setup so move on.
5. Let the as
6. Select Tax Rate Code Source as None.
7. Enter the in
8. Save the Setup
1. Query the
2. Select the as
3. Enter the , in case multiple currencies are used
4. Enter the . This value should be in negative, as the adjustment amount will be negative of the invoice amount.
5. Enter the .
6. Leave Primary Check box uncheck as it does not relate to adjustment
7. More Tabbed region also does not relate to adjustments.
8. Save the Approval Limit
With this Bad Debts or Transaction Write-Off is ready to work
How to use this adjustment
Follow below steps-
Query the transaction we want to write off. The Transaction should be Complete. Now do the following
1. Go to Menu and select
2. Select the you’ve created for Bad Debt or Write-Off
3. If the whole transaction amount needs to write-off then select as . If partial amount needs to be write-off then select .
4. If you select Type as Line then we have to enter the negative amount to be write-off otherwise for Invoice Type the whole outstanding amount comes in automatically.
5. We have to create the accounting of adjustment separately or run the Create Accounting Report
When we save the transaction the outstanding amount is write off and following Account Entry is created for Adjustment
Activity GL Account / Adjustment DR