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Write Off an Unpaid Invoice

Updated

What this does: Writes off an unpaid invoice you consider bad debt, from All Sales/Invoices or from a contact’s Billing tab.

Applies to: GrowthZone staff with access to Finance.

Before you start: Confirm the invoice is unpaid. You can’t write off a paid invoice. Don’t date the write-off in the past, because that skews your accounting records.

Time needed: About 2 minutes per invoice.

Write off an invoice

  1. Go to Finance, Billing section, click All Sales/Invoices. Use the filter options to display only unpaid invoices, making it easier to locate the invoice you wish to write off.
    All Sales/Invoices page under Finance, Billing section, with the unpaid-invoice filter applied and the filter control boxed
  2. Alternatively, open the member’s contact record and click the Billing tab to locate the invoice.
  3. Click Actions (⋮ or gear icon) for the invoice you wish to write off, then click Create Write Off.
    Invoice row with the action icon menu open and Create Write Off boxed

  4. Configure the write-off fields:

    • Write-off date: Defaults to today. IMPORTANT: Do NOT set this to a past date — doing so will negatively impact your accounting records.
    • Notes: Internal use only. This is a required field.
    • Purchase Details: Read-only. Displays the invoice details.
    • Write Off Items: Displays the fee items on the invoice and their associated accounts. The Write-Off Amount defaults to the original invoice amount. To write off only a portion, enter the partial amount for the items you want to write off and set the others to zero. The Debit Account defaults to the income account associated with the fee item and cannot be changed.


    Create Write Off screen showing the Write-off date, Notes, Purchase Details and Write Off Items grid, with the Write-Off Amount and Debit Account columns boxed

  5. Click Done to complete the write-off.

Accounting Impact

Cash basis: Revenue was not yet recognized, so no reversing transactions are created.

Accrual basis: A reversing entry is created to “undo” the original adjusting entry. The account selected as the Debit Account will be debited.

Example — Invoice created on 1/1/2020, written off on 8/10/2020:

  • On 1/10/2020: Accounts Receivable debited $1,000 / Event Revenue credited $1,000
  • Write-off on 8/10/2020: Accounts Receivable credited $1,000 / Event Revenue debited $1,000

For how voiding or deleting a write-off affects these accounting records, see Void versus Delete for Credits, Write-offs, Refunds, and Overpayments.

Common pitfalls

  • Write-off option not visible: The invoice may already have a zero balance (been paid). Verify the invoice status before attempting a write-off.
  • Backdated write-off: Setting the write-off date to the past will create incorrect accounting entries. Always use the current date unless directed by your accountant.
  • Partial write-off confusion: If you only want to write off part of the invoice, ensure you set the Write Off Amount for items you do NOT want to write off to zero.
  • Debit Account cannot be corrected here: The Debit Account is fixed to the income account associated with the fee item and cannot be changed on the write-off screen. If the wrong account would be hit, fix the fee item’s account configuration before writing the invoice off.

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