Question:
How would you handle/remove a charge account amount for a person that never intends to pay that you want to write off as bad debt?
Prior to following instructions below, please consult with your accountant to see how they’d like Write Offs handled.
Answer:
To handle this, create a new payment option called Bad Debt (Write Off, etc) and assign it to its own GL (General Ledger) code. This makes it easier to find and tally by using the Cash Receipts by Payment Type report. This will retain all the invoice detail, while letting you keep your books straight.
- Go to Setup
- Then Standard Tables
- Then select the Income / Payment Types tab.
- Change the selector to Payment Type.
- Click on Add to enter the following to create the new entry:
- Cash
- Account Description (Bad Debt, Write Off, etc)
- GL Code (Code provided by your accountant)
- Click OK to save your entry.
- Now proceed to your first invoice (History or Batch Payments (F5))
- Select the new entry (Bad Debt, Write Off, etc) in the drop list found in the Pay/Post or Batch Payment window.