Bad debt

Bad debt refers to the amount of money owed to a customer that is unlikely to be repaid by the debtor. It arises when a borrower defaults on their payment obligations, typically due to financial hardship or unwillingness to pay.

Bad debts can have a negative impact on a company's financial health and may require write-offs or collection efforts to recover partial or full amounts.

When invoices you send become uncollectible, you need to record them as a bad debt and write them off.

Write off bad debt

Write off bad debt by writing off invoices

• Create a bad debts expense account, If you haven't done it already.
• Navigate to Invoices list and select the invoice that you want to write off.
• Click on three-dots More options and select Bad debt.

• Select the bad debt expense account or any expense account you want to put the bad debt to it.

• Click Save button.

Cancel the bad debt written off invoice

• Navigate to Invoices list and select the invoice that you want to cancel written off bad debt.
• Click on three-dots More options and select Cancel bed debt.