When an invoice balance is determined to be uncollectible from the customer, it is possible to write off the uncollectible amount as bad debt. This takes the amount you are ultimately unable to collect off of the books. In this guide we are going to show how to write off an invoice as bad debt.
The bad debt write off feature will create a credit note with a bad debt line item to cover the remaining balance. The invoice will be given a status of "Bad Debt" to help you identify that it was not paid in full. Write offs will appear in the "Bad Debt" report.
If an invoice has an open balance then you are able to write off the remaining balance if it is uncollectible. If your invoice has originated from your accounting system then you will need to perform the bad debt write off there.
- Open the invoice you wish to write off in the Invoiced web application.
- Click Actions → Write Off as Bad Debt.
- Your invoice now has a status of bad debt and a zero balance.
You can undo a bad debt write off if you need to for any reason, such as the customer paying the balance or the write off was a mistake. If you need to undo a bad debt write off then you must first void the payment that applies the bad debt credit note to your invoice and then void the bad debt credit note.
- Open the bad debt invoice you wish to undo in the Invoiced web application.
- Click on the payment that applies the bad debt credit note to your invoice.
- Click Actions → Void Payment.
- Go to the bad debt credit note that was previously created during the write off process. It should now have an open balance.
- Click Actions → Void Credit Note.