This article explores Write Offs within Insight Legal.

There are several ways to write off bills and disbursements on Insight, depending on the VAT operation used for your VAT returns and which reports need to be impacted by the write-off. Therefore, please follow the flowchart below to find the option that works best for you.

Below are options to write off Bills and Disbursements within Insight:

Option A

Per the HMRC website, VAT reclaimed on bad debts should be included in box 4 of your VAT return. 

1. Post a credit O5 Office Transfer for the gross amount of the write-off to the bad debts nominal.

2. Post an O1 Office Pay Bill for £0.00, full and final, to ensure the bill no longer shows as unpaid.

    

3. On your bad debts nominal, post a NV Nominal VAT posting. This will ensure the VAT element ends up in box 4 of the VAT return.

Option B

If this write off is not an actual bad debt and, therefore, the VAT reclaim needs to be shown in box 1 of your VAT return, but you would still like the entry to show in your bad debt nominal, please follow the below steps.

1. Post a credit O5 Office Transfer for the net amount of the write off to your write off nominal (or any other nominal of your choosing).
2. Post an OCB Office Credit Note Bill for just the VAT amount and mark this as full and final.

This will ensure the bill no longer shows as outstanding on your Aged Debtors reports. There will be no impact on the fee earner allocation using the above method.

Option C

If you are writing off a bill, but this does not qualify as a bad debt, and you need the cost allocation to go against a fee earner, please follow the below steps.

1. Post an OCB Office Credit Note Bill for the remaining part of the bill.
2. If you would like the cost amount of the write off to go to your Bad Debts nominal, you will then need to post a N9 Nominal Journal posting between the Billed Costs nominal for that matter’s department and the Bad Debts nominal as shown below.

This will ensure the credit note is allocated against the fee earner. However, if you have followed step two to journal the cost amount from the Billed Costs nominal to the Bad Debts nominal, please be aware that the total of your Billed Costs nominals on the P&L will not match your Bills Issued report when compared.

Option D

1. Post a credit disbursement for the net amount of the disbursement and ensure you select the O VAT rate. Select the ‘Pay To’ option of ‘Nominal’ and select the write off/bad debts nominal this disbursement needs to go to.
2. Bill this credit disbursement with the 20% VAT rate selected. This will make a disbursement credit note and will credit the ledger with the VAT amount.
3. Pay off the outstanding bills with £0 full and final Office Pay Bills as shown below.

Option E

Post an O5 Office Transfer for the net amount to the write off nominal of your choosing.

This will leave the disbursement as unbilled to reflect the fact that you were never able to bill this to your client, but will zero out the balance on your matter.

Option F

1. Post an OCB Office Credit Note Bill for the remaining Costs and Costs VAT amounts of the bill and tick the ‘Full and Final’ tick box.
2. If you would like the cost amount of the write off to go to your Bad Debts nominal, you will then need to post a N9 Nominal Journal posting between the Billed Costs nominal for that matter’s department and the Bad Debts nominal as shown below.
3. Post an O5 Office Transfer for the amount of the disbursements to your Bad Debts/Write off nominal.

This will leave the disbursement as unbilled to reflect the fact that you were never able to bill this to your client, but will zero out the balance on your matter and ensure the bill is not left outstanding.

Option G

1. Post an OCB Office Credit Note Bill for the remaining Costs and Costs VAT amounts of the bill and tick the ‘Full and Final’ tickbox.
2. If you would like the cost amount of the write off to go to your Bad Debts nominal, you will then need to post a N9 Nominal Journal posting between the Billed Costs nominal for that matter’s department and the Bad Debts nominal as shown below.
3. Post a credit disbursement for the net amount of the disbursement and ensure you select the O VAT rate. Select the ‘Pay From’ option of ‘Nominal’ and select the write off/bad debts nominal this disbursement needs to go to.
4. Bill this credit disbursement with the 20% VAT rate selected. This will make a disbursement credit note and will credit the ledger with the VAT amount.
5. Pay off the outstanding bill with a £0 full and final Office Pay Bill as shown below:

Option H

1. Post an O5 Office Transfer for the total of the Costs amount and the Disbursements amount of the write off to your Bad Debts/Write Off nominal. Alternatively, you can do this as two separate O5 postings, one for the Costs amount and one for the Disbursements amount.

   

2. Post an OCB for the Costs VAT amount only and tick the ‘Full and Final’ tick box.

Option I

1. Post an O5 Office Transfer for the Costs amount to your Bad Debts/Write Off nominal.
2. Post an OCB for the Costs VAT amount only and tick the ‘Full and Final’ tick box.
3. Post a credit disbursement for the net amount of the disbursement and ensure you select the O VAT rate.
4. Bill this credit disbursement with the 20% VAT rate selected. This will make a disbursement credit note and will credit the ledger with the VAT amount.
5. Pay off the outstanding bill with a £0 full and final Office Pay Bill as shown below:

Option J

To transfer the balance of the write off from the matter to your Bad Debts/Write Off nominal, you will need to post an O5 Office Transfer for the full amount as shown below:

You will then just need to pay off the outstanding bill with a £0 full and final Office Pay Bill as shown below:

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