If the payment of an invoice balance is deemed uncollectible after all collection attempts have been exhausted and you wish to write off this invoice, here are two ways to do so:
CREATE BAD DEBT
Create a “Bad Debt” invoice item in your Plannit account settings under the “Products & Services” tab. This product must be “Non-taxable” and will be equivalent to the balance of the invoice that is unpaid in full. For customers with accounting integration, ensure that this item is linked to a corresponding item in your accounting system.
Add this item as a negative amount to your invoice so that the invoice balance is reduced to $0.
This item does not reduce your operating income, as it constitutes a loss in relation to the customer payment system and not to the company's operations/services.
By keeping your operating income unchanged, sales taxes remain the same.
CANCEL SALES EQUIVALENT TO THE BALANCE
Directly in Plannit, add a negative item to your invoice equal to the unpaid balance without applicable taxes. Example: the balance due is $50.43. This corresponds to a negative sale of $43.86 + tax ($50.42/1.14975).
We are talking here about a taxable sales item. This therefore reduces your total sales and, as a result, your tax rebates for the month.
