To write off bad debt, follow the steps below:
The bill write off feature cannot be found in the dropdown menus of FD but is actually on the posted bill itself. To access the screen, double click on the bill posted to the Ledger card to bring up the double entry screen
Click on Write Off Bill
The following screen will have most of the details automatically filled in. Click Search next to W/Off Nominal and select the required option. For the write off nominal to appear in the search function the nominal must be set as a P&L Income in the nominal set up. The balances will still appear as a negative on the ledger
You can may see in red text stating that you are not able to write off the bill unless the bill is older than 6 months. You will also get the same message if the bad debt gets older than 4 years and 6 months. This is subject to the tax rules for bad debts allowing you to reclaim the VAT in the time frame allowed from HMRC
Click on Post Bill Write Off