How do other SaaS companies handle doing write-offs in NetSuite?
Customer example – A customer signed a three year deal for $36,000 on 3/1/19, billed semiannually, and has been deemed uncollectible after the first invoice ($6,000) was not paid on 5/30/19.
I would make a JE to write off the AR balance and offset to Bad Debt for $6k and adjust the revenue schedule to push the unrecognized balance sitting in deferred revenue of $3k into revenue to properly offset bad debt in the period.
But what do I do with the remaining $30k in uninvoiced billings and unearned revenue? Would I alter the original sales order and revenue plan or is there a better method to recording this?
I’m probably not the most knowledgeable person on this topic by far, but I’m assuming the “deal” is a Sales Order transaction in NetSuite, yes? If so, I would think that after sorting out the open invoices, you would just close the Sales Order using the “Close Order” button. I mean GL-impact-wise the sales order is non-posting anyway, so it doesn’t really affect your COA if it’s hanging out there, but using the Close Order button should remove the Sales Order from the open Sales Orders list and reverse the “impact” hitting the non-posting Sales Order account (or whatever you renamed/numbered that account to, if applicable).
That’s what I would do anyway, but maybe there’s someone else who knows a little better, or maybe y’all have more going on in your account than I’m understanding here.