Miscellaneous Cash (non-Accounts Receivable receipts)
- Adjustments (write-offs for transactions)
- Finance Charges.
They allow you to pre-define the default values for activities you will typically perform. You can control procedurally whether or not the default GL Accounts should be overridden and, if so, how? (for example, override to use the appropriate department).
Note that when you create adjustments, they automatically offset the Accounts Receivable account. You never want to set up these activities using your Accounts Receivable account (that way you have created a wash entry). The accounting for a negative adjustment looks like:
Debit Credit Account (from AR (From thethe activity) invoice)
Typically you will want to minimally set up the following values:
For Adjustments:
- Freight Adjustment (if applicable).
- Tax Adjustment (if applicable).
Finance Charges – Even if you do not use Statements or Dunning Letters, you still may want to account for interest paid. For example, the government will pay interest if they pay late, whether you ask for it or not.
- Bank Fees (specially applicable if you receive payments via wires).
- Small Balance Remaining – It is usually easier to write these off rather than to collect them. This activity generally uses a “cost of doing business” account.
- Bad Debt – Write-off un-collectable items to your bad debt account.
- Inter-company Offsets – If you have intercompany receivables for which you do not receive actual payments but which you need to offset (i.e., to a special intercompany account).
For Miscellaneous Receipts:
- COBRA payments
- Bank Fees
- Company Activities
- Employee Postage
- Other (catch all)
Watch the setup of these accounts. If you use Account Security, you need to be allowed access to all of the possible accounts for miscellaneous cash (and the list can often include most anything).