How to handle a bad debt

Modified on Tue, 26 Mar at 12:05 PM

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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