How do I record bad debt or void an Invoice?
Bad debt is when you have done work and created an Invoice for a Client, but that Invoice will never be paid. How do you write this Invoice off as bad debt? What if you need to void an Invoice?
Answer: Use a negative line item to bring the Invoice value down to zero, and keep track of bad debt or void items using the “Item Sales” Report.
- Find the Invoice that will never be paid and “edit” it
- Create a negative line item called “bad debt” or “void” or something that you will recognize
- Assign the item a unit cost that is the negative equal to the total amount of the Invoice. Set the quantity to 1
- Be sure that the total amount outstanding remains at $0.00 so that you aren’t always expecting to be paid money for this Invoice
So now that you’ve written off the Invoice to $0.00, how do you find bad debt in your Reports? Use the Item Sales Report!
- Go to the “Reports” tab and open up the Item Sales Report
- You can filter your list of items to only show “bad debt” or “void
- All of the bad debt items will be shown with their appropriate negative amounts, too Like all other reports, you can export this to a .csv file or and Excel file.