Write off a bad debt, and what happens if it is paid

When a customer is never going to pay, write the balance off so it stops sitting in your receivables.

1. Go to Invoicing › Invoices and open the invoice.
2. Click Write off and confirm.

TALISK_HQ posts a bad-debt journal entry for the unpaid balance, dated today. It claims back the GST/HST or QST on that balance, in proportion to what is unpaid, and takes the invoice out of your receivables. Anything the customer already paid stays recorded. If the customer was holding part of the invoice back (a holdback), that part is written off with the rest.

If your books report on a cash basis, your cash reports never counted the unpaid part as income, so they show neither the bad-debt expense nor the tax relief, and nothing comes off your sales tax return. On the Quick Method you remit a flat rate of your sales, so the dialog does not promise any tax relief.

An invoice that a credit note corrects cannot be written off: the credit note already took part of the sale and its tax back, so writing off the rest would count that part twice.

If the customer pays after all

• They pay online. The invoice is still payable from the customer's portal link. When a Stripe or Square payment arrives for a written-off invoice, TALISK_HQ reinstates the invoice and records the payment for you, then raises a card in Ledger › Health naming the invoice, the client, how much came in, and what is still owing. If only part was paid, the rest is back in your receivables: chase it, or write off what is left again.
• They pay you another way. Cheque, e-transfer or cash: open the invoice, click Reinstate, then Record payment. Record payment refuses a written-off invoice until it is reinstated. If they tell you through their payment link that they sent an e-Transfer, it waits on the invoice as a pending payment and Ledger › Health shows a card naming it: check your bank, then click Reinstate and Confirm on it, or Reject it if the money never came.

Reinstating reverses the write-off in full, the sales tax relief included, and puts any holdback back where it was: owed to you, but not yet collectible. The reversal is dated today, so it lands in your current period rather than the one you wrote the invoice off in. If today falls in a locked period the reversal cannot post, so an online payment is not recorded: it waits on the invoice as a pending payment, and Ledger › Health shows a card naming it. Check Stripe or Square that the money arrived, open the period, then click Reinstate and Confirm on the pending payment (or Reject it if the money never came).

Cancelling a written-off invoice

A written-off invoice cannot be cancelled: writing it off has already taken it out of your receivables, and cancelling it as well would take it out twice. If it should never have been raised, click Reinstate first, then Cancel invoice. A credit note against a written-off invoice is refused for the same reason, until you reinstate it.