Bad Debtors

Clients can be marked as bad debtors, payments can be written off and the information retained. The amounts collected by and paid to a debt collection agency can be managed through these procedures.

Very small amounts of money owing may simply be written off.

From the Client Details window, click Write Off.

The Balance of the client's account will be transferred to the GL Bad Debtors account, and the client's account balance will be zero.

In the Client Activity window, the description of the transaction will be Write Off.

An entry will be added to the Notes field stating the amount written off and the date it was written off.

At this stage you should mark the client as a Bad Debtor in Client Details > Settings tab.

The client will be marked with a Visual icon and a Visual Note: Special Payment Details Apply.

Any time the client is invoiced a prompt about the bad debtor status and current amount owing will be displayed.

Any time you search for an animal of the client and the animal has a visual icon loaded, the bad debtor icon will be displayed on the right-hand side of the visual icon bar on the Animal Details window. Also, the client's Visual Note will be displayed under the animal's Visual Note.

This allows you to easily identify bad debtor clients when searching by animal.

Bad Debts and Collection Agency Charges

With larger bad debt amounts, debt collection agencies are likely to be involved.

The example below refers to the following charges:

Client debt: $400
Debt collection charges:
Loading fee $25
Commission $100
Total $525

In VisionVPM, the best way to manage the loading fee and commission charged by a debt collection agency is to:

Insert a new Bad Debts Collection Fee general ledger account, if you do not already have one.
- To do this go to Main menu > General Ledger module > General Ledger menu > Chart Of Accounts > Insert.
- In the Account Code field, type the code number for the account.
- Press TAB and enter the description (for example Debt Collection Charges).
- Select Expense.
- Click Save.
Invoice the client for the loading fee and commission using this GL expense code (if known, for example, set fee).
- Click into the GL A/c field and type the Debt Collection Charges code.
- In the Price field, type 125.00 ($25 loading fee and $100 commission) and press Enter.
- Click Save.
- This will add $125 to the clients balance due.

Payment and non payment procedures

There are 3 possible payment outcomes:

The client pays nothing.
The client pays the clinic directly.
The payment comes through the Debt Collection agency.

The client pays nothing

Write the money off.

Note: in general money should only be written off at the end of the financial year. Please get your accountants advice on this.
You need to write off the amount that they originally owed, in this example $400, and reverse the commission and loading fee of $125.

Go to Client Details > select client > Invoice.
Click in the GL A/c field and enter the code for the Bad Debts account.
In the Qty field, type -1.
In the Price field, type -400.
Press ENTER.
Click in the GL A/c field enter the code for the Debt Collection Charges account.
In the Qty field, type -1.
In the Price field, type -$125.
Press ENTER.
Click Save.
- This will reduce the client balance by the amount of this invoice.

The client pays the clinic directly

If the client pays the full amount, that is, the original amount + loading + commission fee = $525.00

Process the Payment for $525.00 in the usual way from the Client Details window.

If client pays only the original debt they owed, for example, $400.00:

Process the Payment for $400 in the usual way from the Client Details window.
Create a negative invoice for the remaining $125.00 using the GL A/c code for the Debt Collection Charges.

The payment comes through the debt collection agency

Payments from debt collection agencies are often for more than one client.

There are two possible scenarios, that is, the client pays the full debt of $525.00 or the client only pays the original debt of $400.00