How do I write off bad debts?

Summary

This article explains the process to follow when you have classed an invoice as being bad debt and wish to write it off.

Remember: To check the V.A.T. rate of the invoice Prior to posting. Make sure the Credit is posted the same.

Go to " Sales Ledger Invoice/Credit Notes".
On the "Date :" enter the date that you wish the debt to be written off on.
Set the "Invoice/Credit :" to 'C'.
On the "Account :" set the 'account' to the customer who has "bad debt", press <Enter>.
On the "Sales Centre :" enter the 'Sales Centre' for 'Bad Debt' and press <Enter>.

If you do not have a "Bad Debt" centre you will need to create one (see 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 'Profit & Loss - Overhead'. (see article - How do I Create a Nominal Code?)

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