How to write off bad credit

[Bob Taylor]

On Fri, 2009-01-16 at 15:18 +0800, 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.
> > 
> > No. You reverse enter it. You decrease the A/R account by the remaining
> > balance and enter that amount as an increase in Expense::Bad Debts.
> 
> That way it does not show up in the report of the customer. And that's
> the problem. I have now done it the way you suggest. Still it's not in
> the customer's report that it is cleared that way.

Sounds like a bug in Reports->Business->Customer Report unless there is
an option to allow all zero balances to be printed. I don't use Gnucash
for business so I'm basing this on my year of accounting 101.

> > > 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!
> > 
> > You should have an account Assets::Sales. You should have an account
> > something like Assets::Sales Returns & Allowances. This account balance
> > is a contra-account if my memory serves me. It should be a sub account
> > under Sales. You *can* create an expense account Sales Refunds. This
> > *should* be a contra-account under Sales.
> 
> Well I can just as well use the same Assets:Sales account for that, as
> basically the actual value of the goods sold is decreased, which is why
> a refund has to be made. But again that's not the real point: the point
> is how to book it against that customer, so that it shows up in the
> customer's report.

If you need to refund a customer via the A/R account then the Customer
report should show that entry in the A/R. Right now, I fail to see why
not. Posting a $1,000 refund to the customer's A/R account and posting a
$1,000 refund to Sales::Refunds should show up in your customers A/R
report.

> > It doesn't sound like the Gnucash do not wish to correct design flaws.
-- 
Bob Taylor