How can I clear a negative WIP balance from a client?

ias-5665

How can I clear a negative WIP balance from a client?

18th March 2008

IRIS Time and Fees

I have a negative WIP balance on a client account and do not know how to clear it.

Before you can clear a negative WIP balance you will first need to identify what is causing the balance to negative by running a billing decisions report. This will list postings that affect the client’s WIP balance. To run a billing decisions report
1. Log on to IRIS Time.
2. Click on Reports and select Client reports | Billing Decisions
3. The client billing decisions report will be displayed. Click on the selection tab and enter the client identifier.
4. Click OK.

Below are a number of scenarios that can cause a negative WIP balance and possible ways of clearing the WIP balance:

• Invoice posting
• Opening balances and WIP adjustment postings
• Interim invoices

Invoice posting

When you post an invoice it is possible to write out to a higher value than was present on the client’s balance. For example, if a client had a £100 WIP balance and you invoiced £300 and did a write out for £150, producing a negative WIP balance of £50.
To clear a negative WIP balance for an invoice: (a) Use the credit feature, or (b) Transfer the WIP, or (c) Reverse and repost the invoice with a different write out value, or (d) Make more timesheet postings (a) Use the remove credit feature: The remove credit feature will reduce the credit WIP on the client or client job to zero. In the example above, using the ‘remove credit’ feature will change the balance from -£50 to 0 and will adjust your recovery.

To use the remove credit feature:
1. Log on to IRIS Time.
2. Click File | Housekeeping | Remove credit
3. The ‘Remove unwanted credit postings‘ screen displays. Enter in the Time Period to which to post the contra entries.
4. Enter the date to give the contra postings.
5. Enter narrative (optional).
6. Click the Selection tab.
7. Type in the client ID for the required client.
8. Click OK when you have made the selection.
9. The ‘list of unwanted credit postings‘ screen displays. Select each posting you wish to post a contra against.
10. Click Remove CR.
11. The credit posting will have been removed. (b) Transfer the WIP to another job WIP can be transferred from one job to another. For example, if you have a negative of £100 on accounts and a positive £100 on tax.

To transfer WIP:
1. Log on to IRIS Time.
2. Click Post WIP.
3. Select General Adjustment.
4. The ‘choose a time period’ screen displays. Select a period.
5. The Post General Adjustment to Period screen displays.
6. In the Posting type section, select Debit. This will add WIP to the client’s WIP account. (If you wish to reduce WIP select credit).
7. In the amount (WIP) field, type the value of WIP. For example, £50.
8. In the posting date field, enter the date of the posting.
9. Type in the client identifier in the client/Non charge field. For example, A001.
10. In the job field select the client job. For example, ACC.
11. The remaining fields are optional. Click Post to make the posting.
12. Click Close to exit.
13. The Time Ledger screen displays. Click the menu item Pending Queue.
14. Select Update Ledger.
15. The ‘update time ledger WIP’ screen displays. Select the Other Postings option.
16. Click OK (c). Reverse and repost the invoice to a different value Reversing and reposting an invoice will allow you to remove what you have done so far and re-enter different write out values.

To reverse an invoice:
1. Log on to IRIS Fees.
2. Click Enquiries | Account Details.
3. The Fees Account Display screen will be displayed. Type in the client identifier.
4. A list of the client’s fees postings will be displayed. Highlight the invoice and click View.
5. The invoice screen displays. Click Reverse.
6. Select the date of the reversal and choose a Fees period.
7. Click OK. (d) Make more timesheet postings By making more timesheet postings the credit WIP balance on a client will reduce.

Opening balances and adjustment postings

When you first start with IRIS time you may have posted some opening balances.

You can adjust these postings by transferring WIP To transfer WIP:
1. Log on to IRIS Time.
2. Click Post WIP.
3. Select General Adjustment.
4. The ‘choose a time period’ screen displays. Select a period.
5. The ‘Post General Adjustment to Period’ screen displays.
6. In the ‘posting type’ section, select Debit. This will add WIP to the client’s WIP account. (If you wish to reduce WIP select credit). 7. In the amount (WIP) field, type the value of WIP. For example, £50.
8. In the posting date field, enter the date of the posting.
9. Type in the client identifier in the client/Non charge field. For example, A001.
10. In the job field select the client job. For example, ACC.
11. The remaining fields are optional. Click Post to make the posting.
12. Click Close to exit.
13. The Time Ledger screen displays. Click the menu item Pending Queue.
14. Select Update Ledger.
15. The ‘update time ledger WIP’ screen displays. Select Other Postings.
16. Click OK.

Interim posting

Interim invoices can place a client’s WIP balance into negative WIP if the value of interims is greater than the value of WIP on the client’s account. For example, a client with £200 of WIP postings and £300 of interims will have a WIP balance of -£100. To clear interim invoices: a) Finalise the interim b) Reverse and repost the interim.

Related ArticlesKB IAS-6344: Example of using interim invoices in Time & Fees. KB IAS-11911: How do I reverse an invoice that was posted incorrectly?