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There are a few options to post a write off on Insight, and it depends on your VAT Operation and the circumstances of the write off as to which one is best for you.

HMRC Bad Debt - For Bills Issued VAT Operation

Option A - Is this an actual Bad Debt?

Per HMRC’s website (https://www.gov.uk/vat-returns/fill-in-your-return), VAT reclaimed on bad debts should be included in box 4 of your VAT return. The below steps will ensure this is the case.

Step 1:

Go to Accounts > Client
Post a Credit O5 Office Transfer for the gross amount to your bad debts/ write off nominal

Step 2:

Select O1 Office Pay Bill and click on the outstanding Bill

Change the amount to £0.00

Mark the Payment Allocation as 'Full and Final' and then post

The bill will no longer show as unpaid.

Step 3:

Go to Accounts > Nominal
Lookup and open the bad debts / write off nominal
Select NV Nominal VAT
Enter the VAT amount as a credit
Click Post

This final posting will ensure that the VAT element appears in Box 4 of the VAT Return.

Write Off Costs Only - For Bills Issued & Cash Received VAT Operations

Option B - Writing off Costs Only to compare Bills Issued Report with Profit & Loss Report

Step 1:

Go to Accounts > Client and lookup Matter
Post a Credit O5 Office Transfer for the NET AMOUNT of the write off to the bad debts / write off nominal

Step 2:

Post an OCB Office Credit Note Bill for the VAT AMOUNT and mark it as 'Full & Final'

The Bill will no longer be outstanding on the Aged Debtors Report, and there is no impact on Fee Earner allocation. The Bills Issued and Profit & Loss Reports will agree.

Option C - Writing off Costs Only to allocate against a Fee Earner

Step 1:

Go to Accounts > Client and lookup Matter
Select OCB Office Credit Note Bill and select outstanding Bill

Post the OCB Office Credit Note Bill for the remaining part of the Bill, ensuring that the posting is marked 'Full and Final', and the allocation is correct
Click Post

This will ensure that the credit is allocated against the Fee Earner's total billing figures.

Step 2: (Optional)

If you need the cost amount to go to the bad debts / write off nominal

Go to Accounts > Nominal

Look up the Billed Costs Nominal for the correct Department

Select N9 Nominal Journal

Enter the Cost amount and select Credit
Look up the bad debts / write off nominal in 'Destination'
Ensure that both 'Bank' and 'Destination Bank' have the same bank selected

By posting this N9 Nominal Journal entry, please be aware that the total of your Billed Costs Nominals on the Profit & Loss Report will not match the Bills Issued Report.

Write Off Disbursements Only - For Bills Issued & Cash Received VAT Operations

Option D - Writing off Disbursements Only with billed VAT

Step 1:

Go to Accounts > Client and lookup Matter

Select O4 Office Disbursement

Enter 'Reference', 'Description'
Select 'Nominal' from the 'Pay To' drop down list

Enter the NET amount of the Disbursement and select the 'O' VAT rate
Select 'Credit'
Select the bad debts / write off nominal from the nominal lookup

Click Post

Step 2:

Select O6 Office Bill

Enter 'Reference' and 'Description' Do not enter any 'Costs' as this is a credit disbursement bill

Click on the Disbursements tab and select the credit disbursement and the 'Bill VAT Rate' of 20%

Go to the Summary tab and post the Bill

Step 3:

Select O1 Pay Bill

Click on the Credit Disbursement Bill and Amend the amount to £0.00

Mark as 'Full and Final'

Click Post

Option E - Writing off Disbursements only with no VAT billed

Go to Accounts > Client

Select O5 Office Transfer

Enter the 'Reference' and 'Description'
Enter the 'Amount' and select 'Credit

Select Nominal as the Destination and look up the bad debts / write off nominal
Ensure that both banks are the same and click post

This will leave the original disbursement as Unbilled but will zero the balance in the ledger.

Write Off Costs & Disbursements - For Bills Issued & Cash Received VAT Operations

Option F - Fee Earner Allocation and NO VAT on Disbursements

Step 1:

Go to Accounts > Client and lookup Matter

Select OCB Credit Note Bill

Enter the Costs and Costs VAT to be written off
Mark as 'Full and Final' and Click Post

Step 2: (Optional)

If you need the cost amount to go to the bad debts / write off nominal

Go to Accounts > Nominal

Look up the Billed Costs Nominal for the correct Department

Select N9 Nominal Journal

Enter the Cost amount and select Credit
Look up the bad debts / write off nominal in 'Destination'
Ensure that both 'Bank' and 'Destination' bank have the same bank selected

By posting this N9 Nominal Journal entry, please be aware that the total of your Billed Costs Nominals on the Profit & Loss Report will not match the Bills Issued Report.

Step 3:

In the Matter Posting screen, select O5 Office Transfer

Enter 'Reference' and 'Description'
Enter the amount of Disbursement and select Credit

Select Nominal as 'Destination' and lookup bad debts / write off nominal
Ensure banks are the same and click Post

This will leave the Disbursement unbilled but will zero the balance on your ledger and ensure the Bill is not outstanding.

Option G - Fee Earner Allocation and VAT billed on Disbursements

Step 1:

Go to Accounts > Client and lookup Matter

Select OCB Credit Note Bill

Enter the Costs and Costs VAT to be written off
Mark as 'Full and Final' and Click Post

Step 2: (Optional)

If you need the cost amount to go to the bad debts / write off nominal

Go to Accounts > Nominal

Look up the Billed Costs Nominal for the correct Department

Select N9 Nominal Journal

Enter the Cost amount and select Credit
Look up the bad debts / write off nominal in 'Destination'
Ensure that both 'Bank' and 'Destination' bank have the same bank selected

By posting this N9 Nominal Journal entry, please be aware that the total of your Billed Costs Nominals on the Profit & Loss Report will not match the Bills Issued Report.