What are write backs?

Write backs are a process that allows you to adjust the vendor payable amount for an item for which the supplier fails or forgets to invoice you. By creating a write back pricing, you can reduce the vendor payable amount to zero and increase your profit margin. The write back pricing is then reconciled with a zero balance payment, which clears the item from the list of outstanding vendor payments.

How to enable write backs

Before you can use the write back feature, you need to configure some settings in the booking management module (BMM). These settings are related to the branch, the security profile, the vendor profile and the pricing item that will be used for the write backs.

Follow these steps to configure the write back settings:

• Go to Options > System Settings and enter the Vendor Write Back Pricing Description. This is the default pricing description that will be used when write back pricings are created. You can use the lookup field to search for an existing pricing item or create a new one.
• Go to Options > Branch Details > Financial 1 tab and tick the Require Buy Price Change Codes checkbox. This will make the BMM ask for a reason code when a write back pricing is created. You can also enter the Default Write Back Reason, which is the default reason code that will be used for the write backs in that branch. You can use the lookup field to search for an existing reason code or create a new one. Please note that this is an optional step.
• Go to Options > Access Profiles > Security Profiles and retrieve your security profile or the security profile of your staff members that will handle write backs. Go to the Reconciliation tab and in the Vendor Payment Reconciliation section, tick the Can Reconcile Write Backs checkbox. This will enable the Write Back option in the Reconciliation Actions drop-down in the Reconciliation Results tab.

• Retrieve the vendor profile of the supplier against which you wish to configure write backs > go to the Financial 1 tab > the Number Of Days After Item Start To Allow Write Backs field controls the pricings that can be processed by the vendor write back process, based on their item’s start date.

  This field does not accept numbers with decimal places; however it accepts negative numbers in order to allow write backs on items before their start date. For example, if you only want write backs to be processed on items that departed more than 6 months ago, set this field to 183 days.  

  When a user selects a pricing/item after setting the Reconciliation Action to Write Back during vendor payment reconciliation, the booking management module will check if the item has a start date inside of the number of days specified in this vendor profile setting.

How to reconcile write backs

Once you have configured all the write back settings, you can reconcile write backs for any booking item that has a vendor payable amount whose item start date falls within the range configured in the vendor profile.

Follow these steps to create and reconcile write backs:

• Go to Bulk Operations > Vendor Operations > Vendor Payment Reconciliation > enter the name of the supplier you wish to reconcile write backs for.
• In the Action dropdown select the Write Back option.
• Select the records you want to write back individually or by using the Select All button.
• Select the Write Back button. The booking management module will check that at least one pricing has been selected from the grid and if no pricings are selected it will warn you with a message: “There are no items marked for actioning”.
• Selecting the Write Back drop-down option triggers a two step process: 
  • The addition of a Write Back pricing line for each selected record. This new pricing will result in the overall item’s outstanding vendor payable amount becoming zero.  The write back pricing’s customer sell amount will always be set to 0.00 to ensure that the pricing does not affect the item’s customer payable amount.   The overall item’s commission will be increased by the amount that was expected to be paid to the vendor, which never was paid.
  • The Reconciliation of the Vendor Balance Payment. Once the write back pricing(s) have been inserted against each of the selected pricings in the Results tab grid, the vendor balance payment is automatically reconciled for the original pricings and the corresponding write back pricing(s).

Examples:

If the original pricing has a buy of 400 with no vendor deposits/part payments reconciled, the write back pricing will have a buy value of -400.  Two vendor payments of 400 and -400 will be reconciled, which therefore contra each other out.

But if the original pricing had a vendor deposit payment of 100, the write back pricing would have a value of buy amount of -300.  Two vendor payments of 300 and -300 would be reconciled in this case.