Negotiated Settlements In A/R

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Negotiated Settlements In A/R

If you negotiate a settlement with a customer in accounts receivable, you would need to write off the remaining amount as bad debt. Go to the "Payments" Module step in the A/R Module. Enter the general ledger account number to write off the remaining amount of the invoice to. Check off the bad debt box on the batch number pop up form. Select the customer and the payment amount screen will pop up. Enter the remaining amount of the invoice in the amount paid field and press OK. Then select the invoice for payment.
The results of this process should be documented.
We strongly recommend that you consult with your accountant or CPA for the preferred method of handling this transaction. Some transactions may have potential tax and/or legal ramifications that should be discussed with your advisors.