Small balance write-offs are handled in our cash application screen as an adjustment that is booked to an Allowance for Bad Debit GL account. Large balance write-offs are recorded in Accounting Seed as a credit memo that is applied to the balance of the billing to be written off.
Small balance write-offs
- Click the Apply button form the cash receipt that is associated with the billing to be written off.
- Set the Adjustment Amount field to the write off amount.
- Set the Adjustment GL Account to an Allowance for Bad Debt GL account.
Large balance write-offs
- Create a billing to the customer.
- Create a billing line.
- Enter a negative amount in the Rate field equal to the balance of the invoice to be written off
- Set the Revenue GL Account field to an Allowance for Bad Debt Expense GL account.
- Post the billing.
- Click the Apply Credit Memo button from the Billing.
- Apply the amount of the billing credit memo to the open billing record.