Writing Off a Bad Debt: A Credit Invoice Approach, Slides of Finance

Download Writing Off a Bad Debt: A Credit Invoice Approach and more Slides Finance in PDF only on Docsity! How to: Write-Off A Bad Debt P a g e 1 | 2 Doc:592675887 Overview The purpose of this document is to outline how to write off a sale as a bad debt by raising a credit invoice. Please check with your financial advisor before proceeding Credit Invoice (1) Create a billing group for the order to be written off. (2) If there isn’t one, create a service code for “Bad Debts”. This service will likely be added to in the Product Category “Discounts and Other Finance Charges” or something similar. (3) Create a new order within the billing group for the same value as the outstanding debt. The quantity should be a negative number, the price; the value of the write-off and the total will then be a credit for the value of the write- off. In this instance Joe Brown had a debt owing of $500 that has been credited with the following Credit Order. (4) Job Cost the Credit Order. (5) Pay off both the original unpaid balance and the credit balance using Hyper Pay in Accounting. Post the receipts to the bank register - the net effect is zero funds posted to the bank register