Hello,
What about VAT when a customer balance is written-off :
The reason code allows to post the whole bad debt to an expense account. However, VAT cannot be booked with a reason code though the customer money will never be cashed in.
How do you deal with these situations? What about having a tax category attached to a balance write off?
Thx
Hi
Creating a Credit memo debiting write off account (instead of revenue account ) on a detail line with required tax category is an option you can use instead of regular write off in that scenario. So, the accounting transaction will be Dr. Write off account and Cr. AR control.
You can apply credit memo to the invoice to remove balance from the invoice.
Hope this helps.
Regards,
Thank you Vkumar, This is indeed a valid solution.The only drawback is that you cannot leverage the AR505000 screen (write-offs in bulk)
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