Are you using vouchers…?
I’ve written about many forms of payments in the past; however, one I haven’t touched on is vouchers from charities.
Does your utility deal with social service agencies and church groups that make arrangements to pay utility bills for customers who are struggling to pay their bill?
Do these agencies and charities provide notification (preferably written) that they will pay all or part of a customer’s bill, but don’t send a check immediately?
If the answer to both of these questions is “yes”, then you know it can be a hassle to keep track of which accounts have received a promise to pay. You don’t want to cut an account off for non-payment if their bill is going to be paid by a reputable social service agency.
Does your billing software have a way to handle this?
Some billing systems offer vouchers as a payment method. When you post a voucher payment to an account, the system reflects that a “payment” has been made to the account in the form of a voucher (the promise to pay from the agency).
By posting the voucher to the account as if it were a payment, the account won’t be subject to late penalty or cut-off for non-payment. This is certainly much easier than maintaining a separate list and manually checking accounts to be penalized or cut off against the list.
But, we haven’t actually received payment yet
So you’re probably wondering how the voucher can be posted as a “payment” when you haven’t actually received any money?
In addition to posting the voucher as a payment against the account, the system will also record the voucher as a charge to the agency that provided the voucher.
For a typical payment where cash is received, the general ledger entry is a debit to cash and a credit to accounts receivable. In the case of a voucher payment, where no cash is received, the general ledger entry is a debit to vouchers receivable and a credit to accounts receivable. The effect of the voucher payment is to exchange one receivable for another.
When you do receive a check from the agency
When the agency sends a check, sometimes paying multiple vouchers with one payment, the check is posted against the outstanding vouchers. At any time, you can run a report of outstanding vouchers to see what is still owed by any agency. You can use this report to insure you receive payment for every voucher.