Writing Off a Bad Debt

Geoff_Reynolds2

I have a few invoices that need to be written off. How do you do this in Reckon Accounts Hosted?

I am MYOB trained and Quickbooks and Xero user. In these Account Packages your invoices have the ability to Select the Bad Debt in the account selection.

Thanks,

Jo

Kris_Williams

This is the same, first of all you need to create an expense account called Bad Debts with GST (if you charged GST on the invoices). Then do a customer adjustment note, and create an item called Bad Debts, linked to the same expense account. After you enter the adjustment note the system should ask if you want it to offset an invoice

Geoff_Reynolds2

Hi Kris, I have a Bad Debit in my Expense Account, but how do I make a Bad Debt in my Customer Items and link it to an Expense Account?

Kris_Williams

If you go to create adjustment note, down the bottom where you would select your income account on an invoice, type in Bad Debts, it will ask to set it up, set it up as a service, and link it there to your expense account with NCG tax code

Acctd4

@Geoff_Reynolds2 You create an Item linked to that same Bad Debts Expense account. The tax code should be GST, rather than NCG (because you'll be using it on sales forms)

Kris_Williams

I use tax code NCG because it’s linked to an expense account

Acctd4

@Kris_Williams That would normally be the thinking however because you want this to impact reduction in income (via the Adjustment Note) on the BAS, to do that it needs to have the GST code ☺️

Geoff_Reynolds2

Thanks for that Kris. Why are things so different.

Kris_Williams

There are always many ways to do the same thing, I like the KISS method personally.