In-Period Write Offs with WorkflowMax

Background of issue

In WorkflowMax there is no way to write off a portion of WIP on a job.  This causes a problem when you have a job that spans over multiple months and your WIP gets ahead of the progress you are making on the job.

Let’s look at an example.  Say we have a project that has a contract value of $400,000.  When we are 25% of our way through this project, we might have $140,000 of WIP, but we only feel we can invoice up to $100,000 because this represents the progress we have made.  We need to recognise a $40,000 write off at this stage in the project.

This can we done by raising a ‘Final Invoice’ in WorkflowMax, which create a WIP wash up.  So we will be recognising $100,000 of invoiced value against $140,000 of billable value, which creates a $40,000 write off.  So when we do this final invoice, we create a write off or the $40,000, rather than holding it in our Work in Progress balance. 

The other way to achieve this WIP wash up is to hit ‘Remove from Invoice List’ in the financial tab in the job.  This will apportion the $100,000 of invoiced value against $140,000 of billable value, recognising a $40,000 write off - just like the ‘Final Invoice’.

A video that explains this in detail can be found here.

The problem we have is when we want to keep part of the WIP, and write part off.  There is no way to do this easily in WorkflowMax. Let’s stick with this example of the $400,000 project.  We have $140,000 of WIP, and we want to invoice $100,000, but we also want to write off $20,000 of WIP, not the full $40,000.  There is no easy way to do this. The only way to achieve it is a dirty workaround.

We recommend not using this work around and just wait till you can write the WIP down to 0.00 on the job by doing a ‘Final Invoice’ or ‘Remove from Invoice List’.  The reason we do not recommend this process is because it can cause complications if not done 100% correctly. In saying that however, if you fully these instructions carefully, this is how you do a partial write off of WIP.

How to Resolve

To do a partial write off of WIP, we need to raise a ‘Progress Invoice’ that is on an ‘Actual Time and Cost’ basis. It is very important you get that correct.   ‘Progress Invoice’, on an Actual Time and Cost’ basis.

Uncheck all the tasks and costs that you don’t want to write off.  For the tasks you wish to write time off for, click into the tasks and run through and select either ‘No’ or ‘Future’.  If you select no, that timesheet will be written off. If you select ‘Future’, the timesheet will not be written off.

It is important to note there is no apportionment of the write offs.  It will be a full write off on the entry you have selected ‘No’ for. What this means is if we have $40,000 of timesheets, and we select $20,000 to write off, it will apply the full write off to the $20,000 of timesheets you have select with ‘No’.  It does not blanket apportion the write off $20,000 across the $40,000 of timesheets. This means it is important to select the right timesheet entries.

Once you have selected all the entries as ‘No’ or ‘Future’, save the task.  The invoice total should be 0.00. Approve this invoice. An invoice for 0.00 will be sent to Xero which you can void.

The timesheet entries you marked as ‘No’ will now be written off and the WIP on the job will be reduced by the amount of time you have written off.

Steps to Resolve

• Click into the job you would like to do a partial write off for
• Raise a ‘New Progress Invoice’
• Select ‘Actual Time and Costs’
• Uncheck all the tasks you DO NOT want to write off.
• Click into the tasks that have time you wish to write off.
• Select ALL timesheets entries in the list as either ‘No’ or ‘Future’.  The entries you select ‘No’ on will be written off. The ones you select ‘Future’ on will remain on the job as WIP.
• Save this task.
• Repeat for any other tasks that have time you wish to write off.
• Check your invoice total equals 0.00.
• Hit Approve.
• Void this invoice from Xero.

Timeframe

This will take as long as the number of timesheets you need to click into.  If you have 10 timesheet entries in the task, this will be a 5 minute job. If there are 1,000 entries, it could take up to an hour.

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