How to write off bad credit

[Cam Ellison]

Wouter van Marle wrote:
> Exactly... and there is the core of the problems. To clear the report I 
> basically need to enter a negative amount, and write that off to an 
> expense account.
>   
Well - you cannot do that - GnuCash won't let you.  I still say the way 
to go is to enter a Bill for the amount of the advance, just as you 
would if the supplier had sent you an invoice.  Make it for the same day 
as you made the payment, or earlier.  Use any invoice number you like.  
Putting both an invoice and a payment through the system will balance 
it, and clear the report.  I really do not see that you have any other 
choice, and in any case, you are letting GnuCash do things the way it is 
designed.  As to the amount you have lost, it's an allowable expense.  
There will be no complaint from either your accountant or the taxman.
> Closely related: I have another customer who had a claim against me 
> (material supplied and paid for, but after arrival quality was poor so 
> I have to give them some refund). In this case I have to make actual 
> cash payments, even more reason to have them in the customer reports, 
> so I can keep track on how muhc I owe them!
>
>   
That's more complicated.  You could unpost the original invoice and show 
a discount.  You could show a discount on a subsequent invoice (though 
if you are using GnuCash to print invoices that won't work).  Either 
would show the correct amounts, but of course there won't be anything in 
the report to remind you of what happened. 

HTH

Cam