Write-offs and Refunds

User can write-off invoices and generate refunds of payments already made by advertisers from the accounts receivable module. Navigate to the menu Payments -> Write offs and Refunds. This can be viewed by client, and limited by invoice amount. Once the invoices display, user can check the respective boxes for the invoices to mark as refunded or written off and process the transactions by choosing the action to take on each invoice. For example, refund or write off from the action drop down menu. User can also limit the amount of the write off in the write off cell for this invoice. User then clicks on the button “Process Selections” to process the action.

User will then receive the log id and can view the write off logs also from the node marked as such. User is provided for a hyperlink to the log and view the details of the action with the associated G/L accounts.

To download a report of the write-off, from the Write-off Logs node, click on the pdf icon. User will be prompted to select desired template.

See Write-off Report Templates for details on setting up these templates.

Setup for Write-off/Refund

Navigate to the menu Setup -> Admin -> Group Security -> AR Security node and scroll to the fields in the section “Write-offs and Refunds”. In the field “Maximum Write-Off Amount” enter the amount you’d like to cap the user at for write-offs on the invoices. Check the boxes as applicable to allow for Refunds to be processed by Credit Card to refund the client the write-off on the credit card used to pay for the order or by Check Refunds. Save the settings.

Navigate to the AR module -> Setup menu -> Admin -> AR System Setup.

Scroll to the shutter “Write Offs and Refunds”. Choose the company from the drop-down menu. The “Write-Off G/L Account” column is intended for an expense GL Account and “Refund G/L Account” column is intended for a Refunds Payable GL Account.

If using Naviga A/P Module:

Navigate to the AR System Setup menu as above and scroll to the field “Default Refund Vendor ID” in Client Defaults section. This Vendor must be set up with Vendor Type = MSC to accept multiple Secondary Vendor names and addresses. The vendor type is created in the AP module Setup menu -> Vendor Type Setup, and then associated in the Vendor Maintenance menu with the vendor you use in this step.

Navigate to the menu Customer -> Advertiser Maintenance -> Choose the advertiser and then click the AR Setup node. Scroll to the Credit Info section and enter a Refund Vendor ID. This is optional if this Customer has a dedicated Refund Vendor.

Refund Record Selection

Flag a transaction for refund: Credits and payments records have an Edit Option to “Recommend for Refund.” This only sets this flag for easier selection of records and does not perform any other steps toward a Refund.

Navigate to the menu Payments -> Write-Offs and Refunds. Click in the box for “Specific Client” where you can limit your selection to one or more clients. Click the + sign to add this client and repeat as needed.

The “Maximum Amounts” fields are all controlled by the Group Security setting above and can only be decreased but not increased past the Maximum defined. You can include invoices as well.

You can select any of the payment transaction returned to be processed for a refund or flagged/ unflagged for refund. Ones previously flagged for a refund have a check in the corresponding box.

Write-Off Action

Amounts written-off can be less than the balance of the transaction.

When the write-off is processed, the system creates an Invoice transaction (CM/DM) with a suffix of “.WO” applied to the selected transaction. The second GL Line will be pulled from (in order) 1. Line Item Override Code, 2. Process Override Code, or 3. AR Default Write-Off.

• Invoice written-off creates a Credit Memo with CR to receivable and DR to Write-Off GL Account (loss)

• Credit Memo written-off creates a Debit Memo with DR to receivable and CR to Write-Off GL Account (gain)

• Payment written-off creates a Debit Memo with DR to receivable and CR to Write-Off GL Account (gain)

There are multiple places where the G/L can be set for the Write-off

First, the system will look to one of these places on the write-off screen

If there is an override for the write-off batch or the write-off line item, then that will be used. If nothing is set there, then the system will look to the Product Group (if applicable for the invoice):

If nothing has been set for any of the above, then it will look to the A/R Parameters for what is set as the company default in the Write-offs and refunds section:

Refund by Credit Card Action

This can only be used on a Credit Card Payment that was processed through Naviga in the last 2 to 180 days. Less than 2 days may not work if the Merchant Account has not yet fully recorded the original charge.

The system creates an Invoice transaction (DM) with a suffix of “.REF” applied to the selected Payment. This is a DR to Receivable and a CR to Refunds Payable (as per AR System Setup).

The system also creates an opposite Credit Memo with a suffix of “.REF.1” (CR to Receivable and DR to Refunds Payable) which is paid by a negative Payment of the same name (Check ID) that is sent for CC Processing as a Refund. The negative Payment has a CR to Cash and a DR to receivable, the opposite of the original Payment transaction.

Example of GL lines for Refund by Credit Card:

To Summarize: A normal Refund to CC creates three records (xxxx.CC is the original Payment ID):

1. A Debit Memo that the original CC Payment gets applied to xxxx.CC.REF

2. A Credit Memo, or negative Invoice, exactly opposite the DM xxxx.CC.REF.1

3. A negative CC Payment (the Refund) that is applied to the negative Invoice Cust*xxxx.CC.REF.1

The Debit Memo and Credit Memo use the same GL Accounts so it is just an in/out, but all transactions are required for three reasons:

1. to avoid creating a special type of “negative Payment applied to Payment” type of situation, above just uses “standard” Payments and Invoices

2. if Refund by AP Check is used instead, only the Debit Memo is created, so having Refund by CC start there avoids multiple/different processes

3. if the Refund fails (i.e., declined), then there is no negative CC Payment created and to reset it Clients can just apply the Credit to the Debit.

Refund by Check (without Naviga A/P Module)

The Default Refund Vendor ID is blank and at least one Bank Code (a “qualified bank”) has backend Check Parameters minimal setup. This requires Naviga Support assistance.

The system creates an Invoice transaction (DM) with a suffix of “.REF” applied to the selected Payment or Credit Memo. This is a DR to Receivable and a CR to the Refund GL Account (per AR System Setup). This is the only step, so Clients with this setup may wish to customize the Refund GL Account to meet their specific needs. This is very similar to the effect of a write-off except for the .REF suffix and the GL Account used.

Refund by Check (with Naviga A/P Module)

The Default Refund Vendor ID is populated and at least one Bank Code (a “qualified bank”) has the full Check Parameters setup so that Checks can be printed. This requires Naviga Support assistance.

The system creates an Invoice transaction (DM) with a suffix of “.REF” applied to the selected Payment or Credit Memo. This is a DR to Receivable and a CR to Refunds Payable (per AR System Setup).

In A/P Module, the system creates an Unposted A/P invoice with a prefix of “REF.” belonging to the Default Refund Vendor (or direct Refund Vendor). This is a CR to Payables and a DR to Refunds Payable. This invoice will have a Description mentioning the AR Transaction ID being refunded – this is the only tie-in between A/R and A/P for tracing purposes. The A/P invoice will use a Secondary Vendor name and address that matches the name and address of the Customer in A/R (unless direct Refund Vendor). When this Invoice is paid, the final GL Lines on the Payment will be CR Cash and DR Payables, finally zeroing out all balances.

Example of GL Lines for Refund by A/P Check