Re: [SL] How to account for write-offs

[Jeff R. <je...@jr...>]

Hi Yves

I have a "Bad debts expense" that I flagged for Receivables-Payment when 
I created it.

I simply "receive" the balance directly onto the expense account. ('Bad 
debts expense' will be in the drop down menu along with your bank 
accounts) This clears the AR and the customers account and takes care of 
it directly.

I also have a revenue account called "Bad debts collected" that I 
flagged for Receivables-Income. If I collect the amount later I do a AR 
transaction without having to go and edit the cleared invoice from 
before.('Bad debts collected" will be in the drop down menu of revenue 
accounts) I place a note of which invoice I've collected for in the 
notes section.

Jeff

Yves Lavoie ing. wrote:
> Hi,
>
> What is the prefered way to account for write-offs? I have customer 
> dispute that ended up in a write-off of part of the amount due.
> I figured I could move that amount into Allowance for doubtful accounts 
> and enter GL entries to drop it to zero over a period.
> Is that the way? Any suggestions?
>
> Thanks,
>
> Yves
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