How to write off bad debt

 NOTE: Use these steps if you have unpaid invoices. Consult your accountant if you want to place the taxes owed in a separate account. 

Create a negative invoice with the reverse amount

1. Select Sales Invoices.
2. Select the customer.
3. In the Invoice no. box, enter the original number of the unpaid invoice, followed by the letters WRTOFF.
4. In the Amount column, enter the amount owed as a negative number.
5. Select the magnifying glass icon in the Account column to display a list of accounts.
6. Make sure you select the All Accounts option.

7. Choose the bad debts account, then click Select.
    NOTE: If your accountant has set up the Allowance for Doubtful Accounts, select this account from the list instead. 

8. In the Tax column, enter the tax code used in the original unpaid invoice.
9. To verify the transaction, in the Report menu, select Display Sales Transaction Detail.
10. Once satisfied with the entries, select Process.

Offset both invoices in the receipts window

1. Select Receipts.
2. Select the same customer from the above set of instructions.
   • Both the original invoice and the one created in the first set of instructions display automatically in the table 
3. In the Amount Received column, click to display both invoice amounts.
4. To verify the transaction, in the Report menu, select Display Receipts Transaction Detail.
5. The debit and credit balance must be zero.
6. A message displays "There's no data to report". This is normal and you can process the transaction but no journal entry will result. 

7.  

   Once

   you’re satisfied with the entries. Click Process.

 NOTE: Use these steps if you have unpaid invoices. Consult your accountant if you want to place the taxes owed in a separate account. 

Create a negative invoice with the reverse amount

1. Select Sales Invoices.
2. Select the customer.
3. In the Invoice no. box, enter the original number of the unpaid invoice, followed by the letters WRTOFF.
4. In the Amount column, enter the leftover amount owed as a negative number.
5. Select the magnifying glass icon in the Account column to display a list of accounts.
6. Make sure you select the All Accounts option.
7. Choose the bad debts account, then Select.
   • If your accountant has set up the Allowance for Doubtful Accounts to deal with bad debts, select this account from the list
8. In the Tax column, enter the tax code used in the original unpaid invoice.
9. To verify the transaction, in the Report menu, select Display Sales Transaction Detail.
10. If you’re satisfied with the entries, select Process.

Offset both invoices in the receipts window

1. Select Receipts.
2. From the list in the From box, select the same customer from the above set of instructions.
3. Both the original invoice and the one created in the first set of instructions display automatically in the table.
4. In the Amount Received column, click to display both invoice amounts.
5. To verify the transaction, in the Report menu, select Display Receipts Transaction Detail.
6. The debit and credit balances must be zero.
7. The receipt will be positive from the partial recovery amount.
8. If you’re satisfied with the entries, select Process.