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WriteOffPolicy.doc

2 Pages
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Department
Accounting
Course Code
ACC 100
Professor
Cheryl Dyson

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Description
Rules for the Regulation of Write Offs 1. Account must be 2 years past due or older. There are two exceptions to this: discharges in bankruptcy, and death (with no estate), both of which follow cancellation rules widely held. 2. Account must have been referred to at least one collection agency and have been subject to minimum collection routine of six months. 3. Account must have been returned uncollectible for at least one agency (as specialist in education receivables), with reasons for uncollectiblity. 4. Reasons for uncollectibility and justification for write offs are as follows: i. Cannot locate debtor (skip) ii. Bankruptcy discharge CH. 7 or CH. 13 iii. Efforts exhausted (and no assets or too small to sue) iv. Death, left no estate v. Debtor dispute in which internal documentation cannot support litigation (due diligence lacking) vi. Refusal to pay and statute barred Statue of limitation = Six years 5. Return uncollectible by an agency must be accompanied by individual debtor return with reasons stated on the return document and the master file. 6. Accounts less than 2 years old, other than the exceptions above, which are returned by a first agency after due diligence, must be referred to a second agency and returned uncollectible by that agency before being written off. 7. Write off entries should be made by bursar accounts receivable operations, using only approved “write off” item types. Justification documentation must be provided by business office before any write off is entered in AR. Write off item types are to be applied to the individual terms in question. Transaction and effective dates are only the date the write off transaction occurs. 8. Write off entries must be reconciled and a reconciliation provided to the Business Office. 9. Small balance write offs are balances less than $10.00 (both credits and debits), are greater than one year old (i.e. a prior academic year), and apply only to no longer active students. A small balance write off should be done once per year, at end of FY, and based on a sched
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