Jeff,
I suspect that if you are able to link the write off transaction to the invoice as a payment, this would likely clear it from both the Accounts Receivable Ageing report and the Client report. That linking may be problematical for a bad debt transaction as the Expense Accounts do not show up in the list of transfer accounts you can choose from in the Process Payments dialogue. Equity does show up in the dropdown list but if you use an equity account as the transfer account, then your income for the current period is overstated without the corresponding Expense:Bad Debts entry to reduce the nett income by the amount not paid. It can also results in an overstatement of assets by the amount of bad debts a s receivables always report at their full value and the timing of the bad debt expense recording does not match the recording of the relevant revenue- OK if you are using Cash accounting , but not if you are required to use accrual accounting for your business. Check out the bugs in Bugzilla as I seem to remember this coming up once before. My accounting textbook states that the debt doesn't die when a receivable is written off as uncollectable - the customer's obligation to pay still exists. I haven't had cause to regularly use the business features for more than 10 years now, so I am not certain about this however. I set up a dummy invoice David On Fri, 2024-08-16 at 10:38 +1000, Jeff wrote: > Hi David, > > Again, possibly just my lack of knowledge on the subject, but I > thought > that essentially you cleared the debt from the client by moving it to > the Bad Debt, essentially saying, We are never going to get this > money, > so lets forget about it. (Note I have other means to flag to not > extend > credit to those clients if contact continues). > > However probably the main reason that I thought (or wanted it) to be > cleared from the client is: > When GnuCash is started, it pops up with a screen showing Outstanding > (or Overdue) Invoices. I know that screen can be turned off > completely, > however I like the screen but would like it to reflect only the > outstanding invoices that we are essentially waiting for, not ones we > have given up on ever getting. > > This is assuming that we are never going to see the bad debt money. I > do > understand that if for whatever reason that money does come in later, > that will be a bit messy, but by the time I want to add it to the bad > debts I have given up all hope of getting the money. An example is > the > client is now deceased. > > Again, I might be looking at this completely wrong. Thanks for your > help. > > Jeff. > > On 16/8/24 10:21, David Cousens wrote: > > I think you would have to link the writeoff transaction to the > > invoice > > in the same manner you link a payment if GnuCash will allow you too > > do > > that (I don't know for sure if it will- Derek may be able to > > confirm > > whether it can be). That should clear the invoice > > > > I would not see why it you would want to necessarily remove the bad > > debt from the client report - they still owe you the money, it is > > just > > your judgement that you are never going to receive it. Too many > > bad > > debts to the one client and you would want to look at not extending > > credit to them. > > > > If you ever did receive it, then you would have to do an adjustment > > cancelling the bad debt write off and carrying forward the debt > > into > > the period in which it is paid (bit messy to do). > > > > David > > > > On Fri, 2024-08-16 at 09:29 +1000, Jeff wrote: > > > 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. > > > > > _______________________________________________ > > > > > gnucash-user mailing list > > > > > gnucash-user@gnucash.org > > > > > To update your subscription preferences or to unsubscribe: > > > > > https://lists.gnucash.org/mailman/listinfo/gnucash-user > > > > > ----- > > > > > Please remember to CC this list on all your replies. > > > > > You can do this by using Reply-To-List or Reply-All. > > > > _______________________________________________ > > > > gnucash-user mailing list > > > > gnucash-user@gnucash.org > > > > To update your subscription preferences or to unsubscribe: > > > > https://lists.gnucash.org/mailman/listinfo/gnucash-user > > > > ----- > > > > Please remember to CC this list on all your replies. > > > > You can do this by using Reply-To-List or Reply-All. > > > _______________________________________________ > > > gnucash-user mailing list > > > gnucash-user@gnucash.org > > > To update your subscription preferences or to unsubscribe: > > > https://lists.gnucash.org/mailman/listinfo/gnucash-user > > > ----- > > > Please remember to CC this list on all your replies. > > > You can do this by using Reply-To-List or Reply-All. > > _______________________________________________ > > gnucash-user mailing list > > gnucash-user@gnucash.org > > To update your subscription preferences or to unsubscribe: > > https://lists.gnucash.org/mailman/listinfo/gnucash-user > > ----- > > Please remember to CC this list on all your replies. > > You can do this by using Reply-To-List or Reply-All. > > _______________________________________________ > gnucash-user mailing list > gnucash-user@gnucash.org > To update your subscription preferences or to unsubscribe: > https://lists.gnucash.org/mailman/listinfo/gnucash-user > ----- > Please remember to CC this list on all your replies. > You can do this by using Reply-To-List or Reply-All. _______________________________________________ gnucash-user mailing list gnucash-user@gnucash.org To update your subscription preferences or to unsubscribe: https://lists.gnucash.org/mailman/listinfo/gnucash-user ----- Please remember to CC this list on all your replies. 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