If you have customers that have unpaid or partially unpaid invoices and you need to write it off as uncollectable or bad debt, the best option is to create a Credit Note and assign it to the invoice. This will reduce their balance owing and allow you to keep a record of the invoice.
Please follow the steps below to write off uncollectable invoices or bad debt:
Step 1 - Create a Credit Note
- Click on the Billing tab.
- Click on "Issue Credit Note"
- Select the customer with the unpaid invoice you'd like to write off.
- Select the "Add Credit" option and click "Go".
- Enter the details and make the amount equal to the amount of the customer's unpaid invoice. You can also indicate that the invoice is being written off as uncollectible using the description or reference field (optional).
- Approve the Invoice.
Step 2 - Allocate the Credit Note to the Invoice
- Go to the invoice that you want to allocate the credit to.
- On the invoice click the "Invoice Options" in the upper right corner and click the "Allocate Credit" option.
- Enter the total amount of the Credit Note to the Invoice to reduce the Invoice balance to zero.
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