How to Write off Bad Debt

Bad Debt Write-off

This can be used when a balance needs to be written off an account. The credit memo will lower the debit balance of the A/R account & the offsetting debit entry will be to the Bad Debt expense account.

Enter a Manual Credit Memo

First enter the name Id Number for the account that is to be written off.
The Ledger Date should be the current invoicing date. This determines when it will hit the ledger.
The Document type should be 2) manual invoice. This will create the manual invoice document type. There could still be different invoice type placed on this credit memo.
Accept the Document Number. In the example above, the default was set to use a control number for manual invoices. Blanking out the existing document number & pressing enter will allow a regular invoice number to be accepted.

This is the same process that will be used every time a manual invoice, finance charge, or interest credit is entered.

Entering Ledger Entry from Auditor

Select Last Years Ledger Period as this ledger entry will be part of the auditors entries made for the last month of the year.
1. LDG > Ledger Periods > Select last period > make current.
Enter manual ledger entries. See screen above.
1. LDG > Journal Entries > Manual Journal Entries > Insert New entry.
Be sure to answer YES to Reverse next period as the manual invoices will be flowing through to the ledger in the month they are created.

NOTE: If the manual invoices are not made for several months, you may want to manually reverse this entry in the month the Manual invoices are keyed instead of reversing in the next period. This means you would answer NO to reverse in the next period, but you would want to go to the Ledger period that matches the month the manual invoices are keyed & add another manual entry for the opposite dollar amounts that you keyed on the last month. They will counter-balance the manual invoices that will come in with the SJI creation for that month.

Document Written by A. Mueller