Individual Value Adjustment

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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.

AR collection tools in JustOn

The following table lists tools for collecting overdue receivables. To actively trigger timely payments, by contrast, you can use JustOn's payment collection or SEPA export.

Tool Description
Account statements Account statements are reports that show the billings and payments of a given account for a specific time period. Businesses can use them to remind customers of sales that have not yet been paid, without expressly stating an overdue receivable and without starting a dunning process.
JustOn implements account statements using specific statements that summarize the account's balances.
Dunning statements Dunning statements officially notify customers of overdue payments. According to the overdue status, these notifications can progress from friendly reminders to firm warning letters.
JustOn implements dunning process support based on configurable dunning statements.
Using multiple dunning levels, you can build your individual dunning escalation scenario.
Debt collection If the dunning communication remains unfruitful, businesses may turn customers over to debt collection agencies, who usually proceed to take other collection options.
To support this option, you can specify the name of a debt collection agency when configuring your dunning levels. When set, JustOn copies the name to the invoice, where it is then available for further custom processing.
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.
Write-off Write-off is an accounting procedure for reducing or completely removing the value of an asset or receivable – for example, an uncollectible payment for an invoice.
JustOn supports writing off invoices using specific balances that count against the invoice balance.

To illustrate the options in the context of invoicing, think of the following scenario:

(1) A customer defaults on paying an invoice. You notify them of the overdue payment using account statements or (multi-level) dunning reminders.

(2) If the invoice remains unpaid and becomes more overdue, you may consider applying individual value adjustments in order to devalue the corresponding receivable.

(3) Eventually you realize that the customer is definitely not going to pay – the receivable becomes uncollectible. In this case, you must account for the loss, writing off the open amount.

(4) You may call on a debt collection agency to handle the collection. Usually, doing so also involves an individual value adjustment on your receivable.

Example AR collection scenario

Configuring Individual Value Adjustment
Managing Individual Value Adjustment

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.

IVA Implementation Details

JustOn implements IVA for invoices using specific bookkeeping data.

IVA Bookkeeping Data

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).

IVA Workflow

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 Correction

Users can correct an applied IVA, selecting a lower IVA percentage (or 0%). If they do, JustOn will

  • Create a reverse booking detail for the last applied IVA, and
  • Apply the selected (smaller) IVA.

If there is no lower IVA level defined, JustOn allows for applying an IVA with the percentage 0, which results in reverting the previously created IVA booking detail only.


By default, the new reverse booking detail includes only the original JustOn fields. If you need additional project-specific fields to be copied, you must use the custom setting Copy Additional Fields.

IVA Examples

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