Write Off a Bad Debt

In the Home window, click Customers & Sales on the navigation pane.
Click Sales Invoices.
From the list in the Customer box, select the customer whose debt will not be paid.
In the Invoice Number box, enter the original number of the unpaid invoice, followed by the letters "WRTOFF".
In the Amount column, enter the amount owed as a negative number.
Click the list button in the Account column to display a list of accounts. Make sure the All Accounts button is selected.
Choose the Bad Debts account and click Select. If your accountant has set up the Allowance for Doubtful Accounts to deal with bad debts, select this account from the list instead.
In the Tax column, enter the tax code used in the original unpaid invoice.
To verify the transaction, in the Report menu, select Display Sales Transaction Detail.
If you are satisfied with the entries, click Process.

In the Home window, click Customers & Sales on the navigation pane, click Receipts.
From the list in the Received From box, select the same customer from the above set of instructions. Both the original invoice and the one created in the first set of instructions display automatically in the table.
In the Amount Received column, click to display both invoice amounts.
To verify the transaction, in the Report menu, select Display Receipt Transaction Detail. The debit and credit balances should be zero.
If you are satisfied with the entries, click Process.

Note: Consult your accountant if you want to place the taxes owed in a separate account.