How do I deal with customer non-payment?

[Robert L Brush III]

On Fri, 2011-12-23 at 16:11 +0800, Zhang_Weiwu wrote:

> There are two customers
> 
>  1. One paid full amount, but I only received 95% because the bank took
>     the rest as overseas transaction fee. So there is a difference on
>     invoice sum and on "Payment Information - Amount" (of Process
>     Payment dialogue). The 5% is clearly an expense.

If I understand correctly you have two separate problems that complicate
this: a return/refund situation coupled with an expense not paid from
any of your asset accounts.  If we reduce this to the individual
components it will be easier:

Return/Refund:
You could receive the payment less the 5% so that it will match you bank
statement.  Create a new Invoice with the first item being "Allowed Bank
Transaction Fee" with a negative amount equal to what the bank charged
using the same account used on the previous invoice for sales.
(Income:Sales)  Create a second item of the same amount but positive
charged to another asset account of your choice (I use a top level
account "Refunds") to make the Invoice for -0-.  Now process a payment
for the customer using that account ("Refunds") and you should have
accomplished the following three things:

Recognized that sales are less than previously reported
Not modified the original transaction
Corrected the Accounts Receivable balance

Expense:
I think that your customer would have incurred the expense on the basis
that you have allowed him to short pay, he is the one that has to
explain 5% of the money that did not wind up in your hands.  This amount
was not removed from any of your accounts, which is what creates the
problem of trying to record it.  

If you do want to recognize it as an expense, then you can receive the
entire amount to an "in between" asset account (Asset:Bank That
Transferred Money), like you do for credit card payments.  The idea is
that the customer transferred the entire amount of money immediately to
your/his bank, even if you/he didn't have an account number or ability
to write against the account.  Then a withdrawal was made for an expense
(Expense:Bank Service Charge) and the remainder was transferred to your
"Normal Bank".


>  2. The other simply refused to pay and I decided to account it as a
>     lose. The status is invoice posted but not paid.


Duplicate the invoice, but reverse the sign for each line creating a
negative invoice.  On the last line write "Bad Debt" and use a refund
asset account (Refunds) for the sum of the previous lines, but with a
positive value to create an invoice for -0-  Post then invoice and then
receive a "Payment" for the customer using the refund asset account.
(Refunds)
 
-Bob