Writing Off Bad Debt (Step 3 of 3)
This Solution, along with Solution# 5174 and Solution# 5175 (linked below), describes the process for writing off receivables as bad debt. The general process is to create a negative miscellaneous sale for the amount to be written off, and then offset the positive and negative invoices using the receive money tool.
This is the third of three Solutions detailing the process. (5176)
Step 3. Use the Receive Money Tool to Offset Invoices
Once you have created the negative invoice, you will now need to link this to all of the appropriate open invoices for this Customer. This is done by opening the Receive Money tool in the Customer toolbar and entering in the appropriate Customer. While leaving the Amount field of the Receipt at $0.00, enter the applicable positive and negative amounts in the Applied column in the Apply Payments to Invoices section of the window. This will offset the open invoices which are due. Verify that the Amount and Unapplied Amount fields are both at $0.00 before saving the Receipt.
Note: No postings are created when saving a $0.00 Receipt. The two postings that are created during this process credit Accounts Receivable and debit Bad Debt Expense (or any other selected account).