Corporate Accounts Receivable Write-Off Policy
Policy number: 2026-05
Effective date: April 13, 2026
Last revision date:
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1. Definitions
“Accounts Receivable” means outstanding bill, invoice, debt, penalty, or fee owed to Haldimand County, including any outstanding penalties and user fees imposed in accordance with Haldimand County by-laws.
“Allowance for Doubtful Accounts” means (a "contra-asset") used to estimate the portion of accounts receivable that public sector entity does not expect to collect. It acts as a financial safeguard that reduces the total accounts receivable to its net realizable value on the balance sheet, ensuring financial reports do not overstate assets.
“Collection Agency” means a registered third-party company contracted by Haldimand County for the collection of general accounts receivable.
"Debtor” means a person or organization that owes Haldimand County a sum of money.
“Originating Division” means a Haldimand County division that is responsible for generating accounts receivable in relation to funds due to Haldimand County.
“Write-off” means the closing of a receivable balance and removing from Haldimand County’s account receivable records that is deemed to be uncollectable
2. Purpose Statement
This policy constitutes Haldimand County’s statement of policies and goals relating to procedures and collections of accounts receivables. The policy provides authorization and guidelines for the write-off of uncollectable accounts receivables, excluding Provincial Offences (POA) fines and property taxes which follow separate policies and/or legislation.
It identifies the steps to be taken to collect payment of past due account receivables, establishes conditions/authorization under which an invoice may be cancelled or written-off and establishes write-off thresholds.
3. Purpose
The purpose of this policy is to ensure that Haldimand County is in a position to manage its accounts receivable effectively and to ensure timely collection in order to maintain a positive cash flow, helping to ensure that Haldimand County remains financially sustainable.
4. Scope
This policy applies to all Haldimand County employees engaged in the collection of accounts receivables or other unsecured debt, as assigned, excluding Provincial Offences (POA) fines and property taxes which follow separate policies and/or legislation.
5. Principals
5.1 Accounts Receivable
5.1.1 All amounts determined to be due to Haldimand County must be promptly invoiced and recorded as accounts receivable by the authorized Finance staff. Each Account Receivable must be recorded and maintained until payment is received, or the recorded amount is written off.
5.1.2 Payments shall be applied to the accounts receivable, as per the Debtor’s direction. In case the direction for payment has not been provided, the payment shall be applied against the oldest outstanding accounts receivable and interest noted on the Debtor’s statement. Any remaining credit amount will be applied in order of oldest to most recent arrears at Haldimand County’s discretion.
5.1.3 After one or more instances of a cheque/item received by Haldimand County and returned to the bank as non-negotiable (i.e. non- sufficient funds/closed account/stale-dated/etc.), the debtor may, at the Treasurer’s discretion, be required to pay via guaranteed funds (i.e. certified cheque/bank draft).
5.1.4 Finance will maintain appropriate documentation/recordkeeping of all transactions and write-offs to support the possible future reinstatement of collection efforts when it is deemed feasible in accordance with Haldimand County’s record retention policies.
5.2 Accounts in Arrears
5.2.1 Haldimand County has the authority to charge interest on accounts in arrears. A monthly interest rate of 1.25% (15% per annum) will be applied to all overdue balances unless precluded by legislation, contract, or a by-law.
5.2.2 Due to an administrative error, accounts receivables may be reduced or cancelled upon the sole discretion and written direction of the Treasurer.
5.3 Collections
5.3.1 Haldimand County will utilize all available collection tools under the Municipal Act and any other applicable legislation to collect outstanding balances. A unique aspect for municipalities in the collection of accounts receivable is that they have the ability to add arrears to property taxes, if it is determined that the entity responsible for the overdue account owns taxable property in Haldimand County. This authority is outlined in the Municipal Act section 398(2).
5.3.2 Outstanding accounts are sent a statement of account on a monthly basis.
5.3.3 Once an account reaches 60 days uncollected, we would first utilize “legal right of offset” any apply any amount(s) outstanding owed to the debtor by Haldimand County through our Accounts Payable subledger.
5.3.4 If there is no legal right of offset available, or a balance remains after the offset, the overdue account may be added to the tax roll as permitted by the Municipal Act of Ontario.
5.3.5 Where an addition to the tax roll is not possible, Haldimand County will remove the amount from the Accounts Receivable subledger, include the amount in our Collections Balance Sheet Accounts and forward the overdue account to a third-party Collection Agency and/or commence litigation against the Debtor. Section 304 of the Municipal Act authorizes the use by a Municipality of a registered collection agency for the recovery of a debt. To maximize collection efforts, Haldimand County may use multiple collection agencies.
5.3.6 At each year end, an allowance for Doubtful accounts entry will be recorded to allow for any debts that have not been collected in the year prior at 80%, two years prior at 90% and three years or more prior at 100%.
5.3.7 The collection agency utilizes various collection techniques and tools to locate debtors and obtain payment of the debt. The collection agencies may also place trade liens on the debtors, which may affect their credit rating. The Haldimand County defaulted accounts listed with an agency that remain after an established period of time may be transferred to another agency for further collection activities. The transfer of the accounts to different agencies ensures that accounts remaining outstanding are worked by more than one collection agency to maximize collection recovery. Defaulted accounts may be transferred to more than one collection agency before they are recalled back to Haldimand County for write-off authorization. At no time will more than one collection agency attempt collection of the same debt.
5.4 Write-Off
5.4.1 Once all collection attempts have been exhausted, the account will be deemed uncollectable and will be recommended for write-off.
5.4.2 Write-offs shall be performed against the Allowance for Doubtful Accounts on an annual basis upon authorized approval of those accounts identified as non-collectable. Write-off should occur in the year following the year in which the account was included in the Allowance for Doubtful Accounts at 100% of the amount. Therefore, after an account has remained uncollected for four full years, it will be written off.
5.4.3 An account will be identified as non-collectable if any one of the below items has occurred:
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- Listed with a collection agency;
- Litigation against a debtor is unsuccessful; and
- Legal representation advises Haldimand County that a claim would not be successful.
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5.4.4 The below thresholds permit the write-off of non-collectable accounts receivable balances upon valid authorization.
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- Treasurer or Deputy Treasurer – Amounts up to $25,000 plus any related interest or penalties on a per account basis.
- Council – Amounts above $25,000 plus related interest or penalties on a per account basis will require Council approval.
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5.4.5 Any payment received after an account receivable has been written off shall be credited to the original write-off account(s).
6. Roles and Responsibilities
6.1 Council
6.1.1 Authorizes write-offs for amounts with a balance greater than $25,000.
6.2 Treasurer
6.2.1 Authorizes write-offs for amounts with a balance, equal to or less than $25,000.
6.2.2 Reports annually on collection activities and write-offs to Council in accordance with this Policy.
6.2.3 Seeks Council authorization for write-offs amounts of $25,000, or greater than.
6.2.4 Reviews the policy on an annual basis to ensure that it remains effective and aligned with organizational objectives.
6.3 Supervisor, Accounting Services
6.3.1 Ensure Finance staff are aware, trained, and in compliance with this Policy.
6.3.2 Ensures documentation and records are maintained.
6.3.3 Ensure appropriate allowances are set up annually
6.3.4 Completes write-offs of uncollectable accounts receivable, as per the direction from the Treasurer and/or Council.
6.4 Originating Division
6.4.1 Ensures accuracy of the original account receivable created.
6.4.2 Retains all original documentation, contract, and agreements to substantiate the accounts receivable.
6.4.3 Assists in resolving accounts receivable disputes and/or follows up with the Debtor, where appropriate.
