How to write off bad credit

Wouter van Marle wouter at squirrel-systems.com
Tue Jan 20 03:15:39 EST 2009


On Sat, 2009-01-17 at 07:41 +1100, Doug Laidlaw wrote:
> The OP gave his customer money - a payment in advance, if you like.

Exactly.

> So the customer became his debtor.  The customer owed money, just as an 
> invoiced customer owes money.  In the books, he is a debtor: credit bank, 
> debit the customer.  There should be a debit in the customer's ledger sheet.

Indeed.
There is currently a negative amount at the bottom of the report for
"Total credit" to this customer. So indeed a debit.

> So why not write the amount off to bad debts?  Bad debts is an expense 
> account.  At the end of the fiscal year, it is transferred to Profit and 
> Loss, which gets it out of the books.

And that is exactly the problem: you can't do that directly.
I'm going through the discussion again and I still don't get it how to
do it so it shows up in the report properly.

For the overpayment of vendor issue: I have solved this by making an
invoice called "credit_write-off" (spaces are allowed in an invoice ID
but break the report) of that amount, charging it to an expense account.
That works OK. I don't consider it too pretty a solution but at least
it's in the report and it's clear what it is about.

Wouter.

> 
> Doug.
> 
> On Saturday 17 January 2009 6:16:21 am Derek Atkins wrote:
> > Quoting Bob Taylor <bob8221 at gmail.com>:
> > > On Fri, 2009-01-16 at 12:32 -0500, Derek Atkins wrote:
> > >> Define "handle contra-accounts"?  Of course GnuCash lets you
> > >> create contra accounts but there is nothing special about them.
> > >
> > > If you mean define contra accounts then:
> >
> > No, I meant what I wrote, "define 'handle contra-accounts'?".
> > I know very well what a contra-account is.
> > I don't know what you meant when you asked "does gnucash handle
> > contra accounts?"
> >
> > -derek
> 
> 
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