Claims Out Of Balance: Posting Mill Credit Prior To Job Costing Claim

A common problem causing Mill Claims to get out of balance is the situation where a mill credit is posted before the claim being job costed. Currently, the claims module cannot account for a prepaid claim. 

The following actions cause Mill Claims to get out of balance with the Claims Aging Report:

Posting the mill credit before:

1. job costing
2. job costing in a subsequent month
3. un-job costing a claim with a credit applied

In the event where a credit is posted before job costing, the Mill Claims Due account is posted with a credit. The effect is similar to a customer deposit in normal order entry. However, we do not currently automatically utilize a corresponding prepaid claims (deposit) account.

As long as the Claim is job costed in the same month, the credit is applied, the Mill Claims Due account will balance with the Claims Aging report.

When using the credit before job costing a claim, the following best practice will keep Mill Claims Due in balance:

1. Create a balance sheet account called Prepaid Claims or similar
2. Create an Accounts Payable credit for credit memo and distribute the amount of the credit to the Prepaid Claims account
3. Use the credit as normal

When the Claim is job costed and needs to be settled:

1. Post Mill Credit to Claim from within the claims module for the amount of the credit taken in the previous step
2. When the credit process has taken you to the Accounts Payable module, adjust the Accounts Payable Non-Discountable field to $0.00
3. This will cause the AP Detail Distribution to be out of balance by the amount of the credit memo
4. Click on insert for the distribution and create a counter-balancing line charged to the Prepaid Claims account created in the first procedure.

This process will create a $0 credit memo (the memo was previously utilized), but the distribution will bring the Prepaid Claims account into balance.