Write Off Bad Debt Using a Negative Invoice

You can write off a bad debt by entering and posting a negative invoice for the amount of the write-off. Use this method if you over-bill a client and need to reduce the amount of revenue expected.

This method is typically considered an invoice adjustment as opposed to a bad debt write-off.

To write off a bad debt using a negative invoice:

1. In the Navigation pane, select Transaction Center > Transaction Entry > Invoices.
2. On the Invoices form, click + New Inovice to create a new invoice transaction entry file.
3. Complete the information on the New File dialog box and click Save.
4. On the Invoice form, enter information in the Invoice, Project, and Date field to match the original invoice.
5. Click + Add Detail below the Project Information grid.
6. In the blank row in the grid: In the Invoice Section field, select the section in which the amount to be written off appeared on the original invoice.
7. In the Account field, enter the original revenue account used for the invoice, or a revenue account created especially for write-offs.
   Special accounts allow you to isolate write-offs on the Income Statement, letting you see the total amount of write-offs for the period.
8. In the Amount field, enter the amount to be written off as a negative number.
9. Click Save.
   The net result is a debit to the revenue account, and a credit to the accounts receivable account.