Bad debt invoice process

To write off debt in Storeganise, you’ll need to set up a dedicated accounting code specifically for bad debt. Navigate to Main Settings > Accounting section and create a new accounting code labeled for bad debt transactions. This code doesn’t require a tax type or rate but should include a clear description so it’s easily identifiable for reporting purposes.

Additionally, it’s helpful to create a custom 'Invoice' label under the Labels section in Main Settings, naming it something like "Bad debt." This label will allow you to quickly sort and filter invoices marked as bad debt, making them easy to track and review.

Next, locate the unpaid invoice that you need to classify as bad debt. Click the Labels button on this invoice and select the “Bad debt” label you created, flagging it as a bad debt entry. Then, copy the invoice number of this unpaid invoice for reference in upcoming steps, as you’ll use it when creating an associated credit note. This process will help ensure that both the unpaid invoice and the bad debt adjustment are linked accurately for your record.

After these are done, you can proceed to the following steps.

Create a credit note for the bad debt amount

1. Create a manual invoice:
   • Go to Invoices for the customer’s rental and select + to create a new manual invoice.
2. Add a negative line item:
   • Add a line item that equals the outstanding amount on the unpaid invoice but as a negative value.
   • For example, if the unpaid invoice is $55, enter -55 to create a credit note.
3. Set the bad debt accounting code:
   • In the accounting field, select the bad debt accounting code you created earlier.
   • Add the previously copied invoice number in the description or notes for easy reference.

Zero out the bad debt invoice

1. Add a manual payment to the credit note invoice:
   • After creating the credit note, go into the invoice and select Add manual payment.
   • Choose other as the payment method, with a description like “Write-Off Bad Debt.”
   • Add the payment to effectively zero out this bad debt invoice.
2. Label the credit note invoice: Tag the credit note invoice with the "Bad Debt" label to keep it organized for filtering purposes.
3. Copy the invoice number from this credit note invoice to use in the final step.

Apply manual payment to the original unpaid invoice

1. Return to the original unpaid invoice: Open the original unpaid invoice and select Add manual payment.
2. Record the credit note Payment:
   • Choose other as the payment type and describe it as “Written Off as Bad Debt via Invoice.”
   • Paste the credit note invoice number as a reference to link the credit note to this original unpaid invoice.