How do I deal with customer non-payment?

[Heather J. Daley]

On Thu, 3 Dec 2009, Maf. King wrote:

> On Thursday 03 December 2009 00:40:24 Heather Daley wrote:
>> I have a customer who has paid part of an invoice but is not going to pay
>> the rest.  How do I account for that "lost" income?
>
> Hi Heather,
>
> 2 ways - you could issue a credit note to the customer and reduce Income
> (probably the best way, since you are getting part-payment),

How do I do that in gnucash?  What is the other side of the double entry 
when I reduce the income?

> or
> you could allocate the "lost" bit to Expenses:Bad Debt (although that is more
> for when customers go bankrupt and don't pay any of the invoice)

This brings up a related issue.  This customer also has another unpaid 
invoice, which I simply unposted and rendered inactive because the whole 
thing was going to be ignored.  Is it better to keep it posted and offset 
the entry with Ex:Bad Debt?  What do I then do at tax time?  The invoice 
was for services only, if that makes a difference.

Or is this the kind of question to ask an accountant?  At first I was just 
asking how to do it in gnucash, but it now seems like it's more 
complicated than that.

>
> HTH, and IANAA
>
> Maf.
>
>

-- 

Heather, full of Joy


"Joy is the royal standard floating from the flagstaff of the heart,
                   telling us that the King is in residence."
                                         -Anonymous