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Administrator Guide
Last Updated: 2026-09-18
Set Up Tax Recovery for Invoice Write-Offs

Set Up Tax Recovery for Invoice Write-Offs

You can enable Workday to automatically recalculate tax and create tax adjustment entries when a customer invoice is written off by defining the rules to calculate taxes for each receivable write-off reason.
When you process a customer write-off, Workday automatically calculates the correct recoverable tax amount and posts the necessary entries.
Example: Your business entity in the United Kingdom can reclaim 50% of the value-added tax (VAT) on bad debt. You opt in to the tax recovery on invoice write-offs and configure the receivable write-off reason of
Uncollectible Debt
 with these parameters:
  • Country
    :
    United Kingdom
    .
  • Tax Recoverability Percentage
    :
    50
    .
  • Tax Applicability Override
    : (Optional) A specific Tax Applicability code that will populate on the write-off application and can be used for reporting.
When the entity’s finance department writes off a customer invoice using this reason, Workday automatically calculates and posts a payable document write-off to recover 50% of the original invoice's VAT amount prorated for the total tax-applicable amount that was written off.
  1. Access the
    Edit Tenant Setup - Financials
     task.
    1. In the
      Customer Account Options
       section, select the
      Enable Tax Recovery on Invoice Write-Offs
       check box.
    2. (Optional) In the
      Tax Options
       section, select the
      Enable Tax Point Date Configuration for Transaction Taxes
       check box.
    3. Click
      OK
       and
      Done
      .
    Security:
    Set Up: Tenant Setup - Financials
     domain in the System functional area.
  2. Access the
    Set Up: Customer Accounts
     domain.
    1. From the related actions menu, access
      Domain
      Edit Security Policy Permissions
      .
    2. In the
      Report/Task Permissions
       and
      Integration Permissions
       sections, add the security groups from the corresponding sections of the
      Set Up: Receivable Write-off Categories
       domain.
    3. Select the View and Modify check boxes for the security groups.
    Security:
    Security Configuration
     domain in the System functional area.
  5. Write off a customer invoice.
When the
Bad Debt Writeoff Event
 business process completes, Workday automatically adjusts the associated transaction tax and generates a new operational journal.
Workday also creates a
Payable Document Writeoff Application
 to record the tax entries.
You can view the tax transaction information on:
  • The accounting operational journal of the customer invoice write-off.
  • The
    GoBD
     and
    Saf-T
     integration output reports.
  • These reports:
    • Tax Declaration
    • Transaction Tax Detail for Tax on Invoice Transactions
    • Transaction Tax Liability