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Write off an invoice as bad debt

When a customer is not going to pay, you can write off the outstanding balance of an issued invoice as a bad debt. This records the loss and clears the amount from your accounts…

Write off an invoice as bad debt

When a customer is not going to pay, you can write off the outstanding balance of an issued invoice as a bad debt. This records the loss and clears the amount from your accounts receivable, so your reports stop showing money you will never collect.

Before you begin

  • The invoice must be Issued and still have an outstanding balance.
  • Your Chart of Accounts needs a Bad Debt Expense account. Every chart Sales Scribe sets up carries one (8100 Bad Debt Expense); if yours was set up before it was added, add one under Settings → Chart of Accounts first.
  • A date and a reason are required.

Steps

  1. Open the issued invoice from Sales → Invoices.
  2. Select More, then Write off balance.
  3. Set the Date of write-off. This is the date the bad debt is recognised in your accounts — usually today, or the last day of the year if you are writing debts off at a year end. It cannot be earlier than the invoice date or in the future, and a date inside a locked period is refused unless you can override the lock.
  4. Enter a Reason for write-off (required — it is kept with the accounting record).
  5. Tick the confirmation box and select Write Off Balance.

[Screenshot required: Write Off Invoice window showing the amount, date field, reason field and confirmation checkbox]

What happens next

  • The invoice status becomes Write-Off.
  • The outstanding balance is posted to Bad Debt Expense (recording the loss) and removed from accounts receivable, on the date you chose — so it counts in that period's figures.
  • The invoice is excluded from your receivables from then on, and a full audit trail of the write-off is kept.

Accounting impact

Note on VAT: Writing off a debt records the loss, but it does not reverse the output VAT you charged when the invoice was issued — that VAT still stands. If you need to recover VAT on a bad debt, follow your local tax rules separately.

Reversing a write-off is not a one-click action; it requires an accounting adjustment, so make sure a write-off is really what you want before you confirm.

Troubleshooting

  • "… is a draft and cannot be written off" — only issued invoices can be written off. Issue or delete the draft instead.
  • "… has nothing outstanding to write off" — the balance is already clear; there is nothing to write off.
  • "A reason is required to write off an invoice" — enter a reason and confirm.
  • A missing Bad Debt Expense account — add one under Settings → Chart of Accounts, then try again.
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