Bad Debt is a monetary amount that has been billed but not collected (or never will be) from a Client. We recommend using Credits to record bad debt because this will help to keep your Invoiced revenue numbers accurate.
NOTE: If you sync with QuickBooks, consult with your accountant or bookkeeper regarding how to handle bad debt. There are more options to handle this issue in QB and many of them do not sync. After determining how to handle bad debt in QB, contact the QB Sync Support team at SA to discuss how that decision will work with SA.
Prior to creating a Bad Debt Credit, we recommend that you create a Service (Settings > Services) named Credit or Bad Debt. This service will be used as the line item for the Bad Debt Credit. This way you can track the credits that are used specifically for bad debt.
To add the Credit, use the following steps:
- Navigate to a Client Account.
- Click Add a Transaction.
- Select "Add a Credit".
- Enter details on the Add Credit overlay. Use the "Bad Debt" Service for a line item, if you have one.
- Click Save.
To apply the Credit to an Invoice, you will need to add a bad debt line item to the Invoices you will not be collecting on. Move the amounts from the service items to the bad debt line item. After saving the credit, open it again to see a list of invoices the credit can be applied to.