Who Completes This Task: Accountant 5

Details

SPPS will write off accounts deemed uncollectible; these are no longer recognized as accounts receivable for financial reporting.

Criteria

A debt is considered uncollectible when it meets one of the following criteria:

• All reasonable collection efforts have been exhausted
• The cost of further collection action will exceed the amount recoverable
• The debt is legally without merit or cannot be substantiated by evidence*
• The debtor cannot be located
• The available assets or income, current or anticipated, are insufficient
• The debt has been discharged in bankruptcy*
• The applicable statute of limitations for collection of the debt has expired
• It is not in the public interest to pursue collection of the debt

 Determining that the debt is uncollectible does not cancel the legal obligation of the debtor, except for criteria marked with an asterisk (*).

Steps - Writing Off an Account

1. Accounts Receivable (AR) will prepare a list of uncollectible accounts
2. The Chief Financial Officer (CFO) will designate staff to record appropriate entries as uncollectible

Steps - Restoring a Written Off Account

1. AR will accept payment for previously written off accounts
2. The CFO will designate staff to reinstate the previously written off accounts, record the payment and deposit the funds