Thanks David,
That is a clearer description of what I am doing.
The issue that I have, and maybe it is just my lack of general
accounting knowledge, but the amount ($300) is still showing as owing
from Bob if I either run the Client Report, or open the Invoice.
Shouldn't a written off debt effective remove that debt, so when you
look a that client is shows they owe nothing?
This is the bit that I seem to be missing, or misunderstanding.
Essentially how do I link it to that specific client?
Regards,
Jeff.
On 16/8/24 09:17, David Cousens wrote:
Jeff,
The standard direct write off method for bad debts would be to credit
the Accounts Receivable for the amount of the bad debt and debit an
Expense:Bad Debts account for that amount. That will remove the bad
debt from your Accounts receivable and record it as an expense against
the business as you suggested.
There are more complex allowance methods where your business has a
fraction of bad debts regularly and you are required to use accrual
accounting.
David Cousens
On Fri, 2024-08-16 at 08:53 +1000, Jeff wrote:
Hi list,
Looking for some advice in recording (writing off) some bad debts in
GnuCash when using the Business Invoice/Bills feature.
Example:
Have Client Bob who owes (has been send and Invoice) for $1000.
Bob are disputing the full amount and have only paid $700.
In GnuCash I open the Invoice and record a payment of $700. This
leaves
Bob owing $300.
I can record a $300 amount going into Expenses -> Bad Debts, from the
Accounts Receivable going directly via the Account page.
I think that this then effectively wipes out the debt. (This may be
completely wrong)
My issue is Bob still shows as owing $300. I, maybe incorrectly,
assumed it would effectively show as Bob owes nothing as we have
forgiven the amount owed.
What step am I missing?
Can it be done through the Invoice screen to essentially "pay" the
invoice? The Payment side of the Invoice only seems to show "Assets"
accounts (as expected).
Regards,
Jeff.
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