Account classification
what account type and parent header is allowance for doubtful debts is classified on?
Forum Discussion
Hello jrp3456
Welcome to the Community Forum.
If a customer owes you money but is unlikely to pay, you can write off the bad debt. When you do this, the customer's outstanding balance is removed, your expenses are correctly updated, and any GST liability related to the sale is adjusted.
This is entered into the bad debts expense account, if you do not have this in your file you will need to create it. I have linked our Help Article on writing off bad debts which go through setting up the bad debts expense account and how to write it off.
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