This process begins with one or more invoices that will not be paid and need to be zeroed out. To write off bad debt, you'll create a negative invoice that will post the total amount to an appropriate GL Account. Then you'll create a 0.00 receipt that will "pay" the negative invoice as well as the positive invoices that need to be zeroed out.
1. If one does not already exist, create an "Other" category with a Revenue Account reflecting where in the GL bad debts accrue. This will be either a revenue account (negative sales) or an expense account (bad debt).
2. Create a new invoice with a single line item that will zero out all bad debt invoices. For example, if you need to zero out 15 invoices totaling 10,000, you'll create a new invoices with a single line item of -10,000. Use the bad debt category from Step 1. Note: The date on the invoice must reflect the period in which you are applying the bad debt. This will generate a general ledger transaction reflecting the bad debt.
3. Create a receipt for 0.00. Add the invoices that need to be written off as well as the bad debt invoice. Post the receipt. This will have no accounting impact (the accounting impact occurred in Step 2), but this will close all of the related invoices.
A note about taxes: If you collect taxes you'll want negative GL transactions applied to your tax accounts so as not to pay taxes on bad debt. In this case, add your bad debt category from Step 1 to the appropriate tax profile(s). In Step 2 when you add your line item you will need to enter the total of your bad debt invoices' subtotal. In other words, the line item needs to be a before-tax total since the taxes will be calculated on your bad debt. Take special note of the bad debt grand total and confirm it matches the grand total of the invoices being written off; because of how the system rounds taxes you may need to account for a very small discrepancy.