How to handle a bad debt

Modified on Tue, 26 Mar 2024 at 12:05 PM

[embed]https://youtu.be/9wAFkhKDuNc[/embed]

Option 1 Create an opposite negative transaction

For property managers, or if the rent is a liability Step 1: Create Transaction Go to Tenancies > Statement > Add Transaction (negative number)  



Step 2: Allocate Bad Debt Locate the transaction on the statement and then allocate it to the relevant outstanding debt.

 


Option 2 Create an analysis code for bad debts

For self managing landlords, or if the rent is revenue. 


Step 1: Create an Analysis Code. To understand this see understanding analysis code Go to Preferences > Analysis Codes > Add Analysis Code 


       

*For Xero=users ensure you map this new analysis code* Create the analysis code as shown in the image, if you use Xero you need to map this to your "bad debt" expense nominal account 

 

  

  

Step 2: Create Transaction Go to Tenancies > Statement > Add Transaction


Add New Transaction Bad Debt

    

Once added it will appear as a negative transaction

  

  Step 3: Allocate Bad Debt This will remove the outstanding as being overdue.

 

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