Purpose: Around yearend, or the time we need to pay our PST or GST or income tax, we need to clear invoices off the books that have not been paid for and we don't expect to be paid for. These bad debits need to be cleared of f the books so that we don't pay PST or GST for them.
- Around yearend
- Before paying our PST
- Before paying our GST
- Before paying our income tax
Part A: Write off the bad debit.
- Print or save a copy of the invoice to be written off.
- From the customer navigation, select Create Credit Memos/Refunds.
- In the Customer:Job drop-down list, select the name of the customer.
- In the detail section, on the first line, select the "Bad Debit" item.
- You may receive a warning message regarding item associated with an expense account....click OK.
- Enter the before tax amount in the "Amount" column.
- Enter the sales taxes in the PST and GST amount boxes.
- Click "save & close"
Part B: Clear the bad debit from the Accounts Receivable
- From ther customer navigation window, select Receive Payments.
- In the Received From drop-down list, select the customer name.
- Click the invoice you could not get payment for to highlight it.
- Click the "Set Credits" button.
- The credit memo you created in Part A should automatically be selected. If it isn't, click the credit memo in the checkmark column to select it.
- Click "Done"
- Click "Save & Close"