Before you can write off a bad debt, you need to create a Bad Debt expense account in your accounts list. For more information, see Set up accounts).
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In the Customer field, type or select the customer’s name.
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In the Description field, type a description of the transaction.
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In the Acct No. field, select the account for Bad Debts.
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If you account for bad debts by posting a provision to an asset account (for example, the Provision for Bad Debts asset account), you can select that account.
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In the Amount field, type the bad debt amount as a negative number.
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Click Record.
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You now need to apply the credit against the customer’s original open invoice. You do this in the Settle Returns & Credits window. See To apply a customer credit to an open invoice.
