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.
Summary of Steps:
- 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 are recorded in Accounting Seed as a credit memo that is applied to the balance of the billing to be written off.
Summary of Steps:
- 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.
3. Post the billing.
4. Click the Apply Credit Memo button from the Billing.
5. Apply the amount of the billing credit memo to the open billing record.
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