Invoices and sales
Write off invoices a customer will never pay
Take what a customer will never pay off what they owe and record it as a bad debt expense. Each invoice gets a credit memo you can see and undo.
When a customer won't ever pay, write the invoice off. What's owed comes off Accounts Receivable and goes to a Bad debts expense, so your books show what you'll really collect. Owners, admins and accountants can do it.
- 1Open Write off invoices (Accountant tools › Write off invoices).
- 2Choose which invoices to show (for example More than 180 days overdue), or search for a customer.
- 3Tick the invoices, choose the expense account (Bad debts is made for you the first time), the date and an optional memo.
- 4Press Write off and confirm.
Each invoice gets its own credit memo for what was still owing, marked as a write-off and applied to it, so the invoice shows as paid off and the customer's balance goes down. No money is recorded as coming in, and it isn't counted as a sale given back on your sales tax report.
Changed your mind, or the customer paid after all? Open the credit memo and press Undo write-off (or remove it from the invoice's payments). The invoice is owed again and the bad debt comes out of your books.
A write-off credit memo can't be edited or used on another invoice. It's dated on the write-off date, which can't be before the invoice's own date or in a closed period.