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What happens with uncollectible invoices?

In this article you'll learn how to handle uncollectible invoices in Populi.

But first, you'll lay the groundwork by reviewing your Financial settings and setting up a bad debt account...

Review the Uncollectible... setting

In Financial > Settings, have a look at the Consider uncollectible invoices in Pay Now setting.

  • If you select No (the default), then uncollectible invoices will have to be manually marked Collectible by you in case the student finally decides to cough up the dough.
  • If you select Yes, then payments made to the student's account can be automatically applied to uncollectible amounts. See below for details.

Set up a Bad Debt account

First, make sure you have an account that you can use to write off the uncollected invoice amount.

  1. Go to your Chart of Accounts.
  2. Click Add account.
  3. Enter the account details. For the account type, make sure to select Expense.
  4. When you're done, click Save.

How to mark an invoice uncollectible

unpaid_invoice_mark_uncollectible

To mark an invoice uncollectible:

  1. Go to the invoice's page.
  2. In the upper right of the screen, click Mark uncollectible.
  3. Select the Bad debt expense account you set up for this purpose.
  4. Change the date if necessary.
  5. When you're done, click Save.

After you mark an invoice uncollectible:

  • The unpaid portion of the invoice will be credited against your A/R account and debited against your Bad Debt account.
  • A Sales Credit will be posted to the student's account in the amount of the unpaid portion.
  • The invoice is marked Uncollectible and cannot be paid off (unless your setting is set to Yes—see below).
  • You have the option of marking the invoice Collectible; doing so reverses the above transactions and makes it possible for the invoice to be paid off..

Considering uncollectible amounts in Pay Now

profile_financial_dashboard_pay_now_incl_uncollectible

When you've set the Consider uncollectible invoices in Pay Now setting to Yes, here's how things work:

  1. Marking an invoice uncollectible is unchanged—all the transactions are posted, etc.
  2. However, the uncollectible amount is included in the Pay Now amount on the student's Profile > Financial > Dashboard view and is included as a line item in the summary.
  3. If the student makes a payment, the payment will be automatically applied to the uncollectible invoice just as if it were not so marked. Payments will apply as they do otherwise (meaning that if there are older invoices, those will be paid off before the uncollectible one).
  4. When the payment applies to the uncollectible invoice, it will automatically be marked Collectible (and all the associated transactions will be reversed).
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