[GNC] Best way to close unpaid invoices?

[Adrien Monteleone]

Sorry if I wasn't clear.

At first, there should be no transactions in that account.

Go to Business > Customer > Process Payment.

Enter the customer in the search field at the top.

You'll see the invoice that you need to close out, select it.

Put in the appropriate date, and the amount you are charging off to Bad 
Debts. (eventually)

Select the Allowance for Doubtful Accounts (AFDA) account as the 
Transfer Account.

Put a memo if you like.

Then save the 'payment'.

After that is done, the invoice will be closed out as 'paid' by AFDA.

This then needs to be expensed, so in AFDA enter a transaction for the 
same amount as the 'payment' but this time between AFDA and Expenses:Bad 
Debts.

Not sure if you are using formal labels or not, but the result of the 
payment will be:

Dr. Allowance for Doubtful Accounts (left column)
Cr. Accounts Receivable (right column)

The charge off will be:

Dr. Expenses:Bad Debts (left column)
Cr. Allowance for Doubtful Accounts (right column)

AFDA will now be zero.

Normally, this account is populated at the beginning of an accounting 
period with a reasonable estimate of what you won't collect. It is then 
converted to charged off expense at the end of that period, or monthly, 
whichever you need or works for you.

Of course, you can make specific adjustments like this one as needed.


Regards,
Adrien

On 3/8/21 8:25 PM, Daffy Duck wrote:
> Hi,
> 
> Thanks.
> 
> "For Bad Debts, set up an account called "Allowance for Doubtful
>> Accounts" as a child of AR. (be sure to make this of type 'Asset')
>>
>> You can then 'pay' the invoice using this account as the source.
>>
>> This will cause the invoice to be closed by GnuCash and it will be
>> removed from the Due Invoices Reminder."
> 
> This does not work.  I created an asset account under "Accounts
> receivable" and I put the entry in for the $500, an increase.
> 
> I then tried to assign it as a payment to the invoice.  It said "you
> must select a transfer account from the account tree."