View source for How do I write off bad debts?

== Summary ==
This article explains how to write off a bad debt.  

{{Warning|title=Remember|text=To check the V.A.T. rate of the invoice '''prior''' to posting. Make sure the ''Credit'' is posted with the same rate of V.A.T.}}

{{Note|title=Note|text=Remember that there are time constraints as to when an invoice can be written off as a bad debt. Under current legislation, if your customer goes bust, you must wait six months before you can claim back any V.A.T. Check the HMRC website or with your accountant for the rules regarding this.}}

== More Information ==
* Go to {{Menu|{{SL}}|Invoice/Credit Notes}}.
* On the {{DataPrompt|Date :}}, enter the date on which you wish the debt to be written off.
* Set the {{DataPrompt|Invoice/Credit :}} to {{DataValue|C}}.
* On the {{DataPrompt|Account :}}, enter the {{DataValue|account}} for the customer who has the bad debt.
* On the {{DataPrompt|Sales Centre :}}, enter the {{DataValue|Sales Centre}} for {{DataValue|Bad Debt}} and press {{KeyPress|Enter}}.

{{Note|text=If you do not have a '''"Bad Debt"''' centre you will need to create one.  See the article '' - [[How do I Create a Sales or Purchase Centre?]] ''). Make sure that it is linked to a nominal code which is created as a {{DataValue|Profit & Loss - Overhead}} (see article'' - [[How do I Create a Nominal Code?]]'').}}

* On the {{DataPrompt|Analysis Codes}}, press {{KeyPress|Down}} key.
**This will load up a new screen called '''"Document To Credit Selection"''' which will list the outstanding invoices for the account.
**Select the correct invoice you want to ''"write off"'' and click {{Button|OK}}, which will automatically fill in the {{DataPrompt|Document :}}.
* On the {{DataPrompt|Comment: }}, type {{DataValue|Bad Debt}}, and press {{KeyPress|Enter}}.
*Click the {{Button|Invoice}} button at the bottom of the page or press {{KeyPress|F5}}.
* On the new screen underneath the '''"Product Description"'' enter a reason for the "Write off", then press {{KeyPress|Right Arrow (→)}}.
* Below '''"Total Nett"''' enter the net amount of the invoice to be written off.
* Click {{Button|Invoice}} or press {{KeyPress|F5}} which will show a summary of the credit.
* Click {{Button|Invoice}} or press {{KeyPress|F5}}, which will print out the credit note.
* Click {{Button|Accept}} and the Debt will be credited off.

== See Also ==
* [[How do I Allocate a Payment to an Invoice?]]
* [[How do I call up the CRM?#More Information|How do I call up the CRM?]]
* [[How do I print an Aged Debtor or Creditor List?]]
* [[How to process a month end#Sales Ledger|How to process a month end]]
* [[How do I Create a Sales or Purchase Centre?]]
* [[How do I Create a Nominal Code?]]
* [[How do I Post a Journal with VAT Involved?]]

{{FAQ}}{{KB_Tags|Write, Debt, Write-off, Remove, Cancel, Bad, Payment, Debts, Negative,}}{{KB_SL}}{{KB_PL}}