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Configuring Individual Value Adjustment

Individual value adjustment (or IVA) is an accounting procedure for devaluing receivables, for example, outstanding payment requests for invoices.

JustOn implements IVA for invoices using specific bookkeeping data.

Understanding IVA

Occasionally, a customer may not have the money to pay an invoice when due, for example, when they have gone into insolvency or liquidation. In this case, your business's outstanding payment becomes unlikely to be collected – your receivable becomes a doubtful receivable or bad debt.

When you recognize a bad debt, you usually devalue the corresponding invoice amount by a certain percentage. This allows for reducing the relevant accounts receivable.

The individual value adjustment is usually a preliminary step to a complete write-off.

Implementation details

To support recording individual value adjustments for invoices, JustOn writes booking details of the type IVA. The IVA booking detail amount is calculated based on the invoice net amount and the configured IVA percentage:

(invoice total net - payment net) * IVA rate

If the invoice includes invoice line items with different tax rates, JustOn uses the lowest given tax rate (except for information invoice line items and invoice line items without tax): It calculates the payment net amount from the sum of all payment balances applying the lowest tax rate of the invoice.

When working with contra accounts, JustOn writes the given debtor number to the field Business Partner Account Number of the produced IVA booking details. This behavior resembles the direct depreciation principle (as opposed to that of the indirect depreciation via a dedicated allowance account).

In order to use individual value adjustments, you must configure IVA levels. These custom settings determine, among others, the percentage by which to devalue the invoice net amount, the condition to be matched for triggering the process and a grace period. Using multiple IVA levels with an increasing IVA percentage, you can build your individual invoice devaluation chain.

If set up accordingly, JustOn creates IVA booking details either automatically, when the scheduled job IVA Creation Job is executed, or individually for an invoice, when a user triggers the process via the Manage IVA button on the invoice. Using a dedicated collective account setting, you can immediately set the booking account to which allocate the produced IVA booking details.

With respect to the IVA booking detail creation, be aware of the following specifics:

  • JustOn takes existing payments and manual write-off balances into account.
  • If a new IVA level is reached, JustOn reverses the existing IVA booking detail and creates a new IVA booking detail.
  • JustOn writes the IVA percentage of the currently applied IVA level to the field IVA Percentage on the invoice.
  • JustOn adjusts the IVA amount – as represented in an IVA booking detail – every time a user manually sets a new IVA level or with every subsequent execution of the IVA creation job.

The individual value adjustment is usually a preliminary step to a complete write-off. That is, when the IVA percentage has reached a 100%, you will most probably proceed to manually writing off the invoice.

IVA example

This example – registering a payment on an invoice with IVA booking details – illustrates the behavior.

Assume the following invoice:

Grand Total Tax Rate Total Net
1160 16 1000

First booking detail with 30% IVA percentage:

IVA Percentage IVA Amount Description
30 -300 Total Net * 30% = 1000 * 0.3 = 300

Second booking detail with 50% IVA percentage reverses the first IVA booking detail and creates a new one:

IVA Percentage IVA Amount Description
50 -300 Initial IVA
+300 Reverse IVA
-500 Total Net * 50% = 1000 * 0.5 = 500

Registering a payment and then recalculating the IVA amount to the current invoice IVA percentage:

Payment (gross) Payment (net) IVA Percentage IVA Amount Description
50 -300 Initial IVA
+300 Reverse initial IVA
-500 Previous IVA
290 250 +500 Reverse previous IVA
-375 (Total Net - Payment Net) * 50% = (1000 - 250) / 2 = 375

Preparing JustOn for applying individual value adjustments involves:

Configuring IVA Levels

IVA levels control the IVA booking detail creation. They determine, among others, the percentage by which to devalue the invoice net amount, the condition to be matched for triggering the process and a grace period. Using multiple IVA levels with an increasing IVA percentage, you can build your individual invoice devaluation chain.

IVA Levels Information

JustOn implements dunning levels using the custom setting Dunning Levels. It includes the following information:

Label Data Type Required Description
Name Text (255) A unique name for the custom setting record.
Condition Text (255) A custom SOQL condition to determine to which invoices this IVA level applies. If empty, JustOn uses the following default condition:
DaysOverdue__c >= :gracePeriod AND (IVAPercentage__c = null OR IVAPercentage__c < :ivaPercentage)
Days Overdue Field Text (255) Defines a source field that specifies the number of days by which the invoice is overdue.
Grace Period Number (18,0) The number of days after the invoice payment due.
IVA Percentage Percent (13,5) The rate (in percent) of the individual value adjustment applied when the current IVA level is reached.
Include Standard Condition Checkbox If checked, the resulting condition is a combination of the default condition and the one defined with the current IVA level.

Defining IVA Levels

To cover your (possibly complex) IVA process requirements, you may have to create different IVA level configurations.

  1. In Setup, open Custom Settings.

    In Salesforce Lightning, navigate to Custom Code > Custom Settings.

    In Salesforce Classic, navigate to Develop > Custom Settings.

  2. Click Manage in the row of IVA Levels.

  3. Click New.
  4. Specify the details as necessary.

    The mandatory information include Name and IVA Percentage.

    For more details, see IVA Levels Information.

  5. Click Save.

    This creates the IVA level configuration, making it immediately available for the IVA creation job or individual IVA application.

Defining Collective Account for IVA

To create a new collective account setting for IVA booking details:

  1. In Setup, open Custom Settings.

    In Salesforce Lightning, navigate to Custom Code > Custom Settings.

    In Salesforce Classic, navigate to Develop > Custom Settings.

  2. Click Manage in the row of Collective Accounts.

  3. Click New.
  4. Specify the information as necessary.

    Field Required Description
    Name A unique name for the custom setting record, describes the purpose of the collective account.
    JustOn recommends to use a descriptive name for the setting.
    Account Specifies the intended booking account number as given by the accounting system.
    Type Specifies the type of the collective account, directly corresponds to the type of the booking detail.
    For IVA booking details, set IVA.
    Business Partner Account Specifies, if necessary, the intended business partner account number (contra account) as given by the accounting system.

    For more details, see Collective Account Concepts.

  5. Click Save.

    This creates the new collective account setting.

Scheduling IVA Creation

The IVA creation job does not require additional parameters. That is, you can set up the job directly for the corresponding batch chain ScheduledIvaRun. For details, see Scheduling Concepts.

To schedule the IVA creation job, you can use either JustOn's Scheduled Jobs page or Salesforce's Schedule Apex functionality. For details, see Scheduling a Job.

Via JustOn's Scheduled Jobs page:

  1. Open the Scheduled Jobs page.

    Use the following URL https://login.salesforce.com/apex/ONB2__JobsSetup, or, if you are already logged in, append apex/ONB2__JobsSetup to your org's domain name.

    As of JustOn 2.52, you can access the Scheduled Jobs page via the JustOn configuration app (App Launcher > JustOn Configuration > Jobs Setup).

  2. From the Apex Job drop-down list, select IVA Creation Job.

    The Job Name field is automatically set to ScheduledIvaRun.

  3. From the Start Time drop-down list, select the preferred execution time.

  4. Optionally, edit the displayed cron expression to adjust the execution time.
  5. Click Schedule.

    This sets up the IVA booking detail creation to be executed at the specified time.

Info

From the Scheduled Jobs page, you can also run the job immediately.

Via Salesforce's Schedule Apex functionality:

  1. In Setup, open Apex Classes.

    In Salesforce Lightning, navigate to Custom Code > Apex Classes.

    In Salesforce Classic, navigate to Develop > Apex Classes.

  2. Click Schedule Apex on top of the list.

  3. Specify the details as required.

    • Job Name
    • Apex Class: ScheduledIvaRun
    • Frequency: Weekly or Monthly (with an according weekday or day of month setting)
    • Start
    • End
    • Preferred Start Time
  4. Click Save.

    This sets up the IVA booking detail creation to be executed at the specified time.

For more details about job scheduling, see Scheduling a Job in the JustOn documentation and Schedule Apex in the Salesforce Help.