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Write off a Sale or a Bad Debt

You would generally be writing off a sale or a bad debt if you do not expect to get paid. Your advisor will give you the best direction regarding when and how to write off sales or bad debts to a customer.

Writing off a Sale

  1. Load the original sale you wish to write off.
  2. Click Duplicate to make a copy of this transaction.
  3. Enter the transaction date as that which you intend the write-off to be accounted for.
  4. When the new sale is loaded, change the sign on the amount for each line item to the opposite sign for each line item. I.e. For a Service layout, change a positive amount to a negative one. For a Item layout, change a positive quantity to a negative quantity
  5. Choose an appropriate account (instead of the income account) if required for each line item. Depending on the nature of the transaction it might be an expense account such as bad debts. Alternatively you can leave it against the income account in order to reverse the income. It depends on the legal treatment of the transaction for which you are best to get advice from your accountant. I.e. it might be a bad debt, cancellation, refund, etc.
  6. Save the transaction.
  7. Select Add > Sale Payment.
  8. Apply a payment to each of the original sales and the new negative sale amount. This will autocalculate $0 cash settlement at the bottom of the payment.
  9. Save this sale payment.

The net result is nil cash flow on the same date. However, both transactions are now paid and cleared from the receivables area in Saasu. The loss/expense or reversed income is now also accounted for.

Writing off a Bad Debt

If in addition to not getting paid for the sale, you also do not expect to have the items or services returned to you, then you will generally write off the transaction as a bad debt.

  1. Go to Add > Sales.
  2. Enter the transaction date as that which you intend the write-off to be accounted for.
  3. Make sure the "service" layout is chosen, not the "item" layout.
  4. For the "account" column choose the ledger account that you want to use for write offs.
  5. In the "amount" column put in the negative amount of the original sale.
  6. You can also fill out the other fields for your own reference, e.g. contact, description, summary etc.
  7. After you save this sale, click on "Sales" and filter it so that both the original sale and new sale show up
  8. Tick both of the boxes for the transactions and click "Pay" at the top.
  9. Save the payment.

This process will net off the amount and will not return the item back to your stock levels.