Unpaid invoices can negatively impact your business’s financial health. PRO Software Solutions provides a structured way to write off bad debt, ensuring your accounting records remain accurate and compliant.
This guide walks you through the step-by-step process of writing off unpaid invoices in PRO Software.
What is a Bad Debt Write-Off?
A bad debt write-off occurs when a customer’s invoice is deemed uncollectible. Instead of keeping the unpaid invoice as an outstanding receivable, it is moved to a write-off account as a business expense.
💡 Pro Tip: Before writing off bad debt, consult with your accountant to ensure proper financial handling.
Step 1: Create a Bad Debt Write-Off Account
1️⃣ Navigate to Accounting > Configuration (Blue Ribbon at the Top of the Screen).
2️⃣ Click Chart of Accounts > Create New.
3️⃣ Enter the required details:
- Code (e.g., BD-001)
- Name (e.g., "Bad Debt Write-Off")
- Type (Classify as an expense)
4️⃣ Click Save to finalize the account setup.
Step 2: Select Invoices to Write Off
1️⃣ Go to Accounting Overview > Invoices.
2️⃣ Apply filters:
- Click Filter > Open to find unpaid invoices.
- Click Group > Partner to categorize invoices by customer.
3️⃣ Select the invoices you want to write off.
💡 Note: You cannot combine multiple customers in a single write-off, but you can write off multiple invoices for the same customer.
Step 3: Process the Write-Off Transaction
1️⃣ Click the Action Button (appears after selecting an invoice).
2️⃣ Choose Register Payment.
3️⃣ Change the Payment Amount to $0.00.
4️⃣ Under Payment Difference, select:
- “Mark Invoice FULLY Paid and Write-Off Remaining Balance”.
5️⃣ Choose the Write-Off Account created in Step 1.
6️⃣ Click Validate to finalize the write-off.
Step 4: Verify Your Write-Off Entry
To confirm that your bad debt has been properly recorded:
1️⃣ Go to Reports (Top Blue Ribbon) > Audit Reports > General Ledger.
2️⃣ Locate the write-off entry linked to the customer’s invoices.
3️⃣ Double-check that the correct accounts were debited and credited.
💡 Pro Tip: If needed, review Journal Entries in the Accounting Module to ensure all adjustments were properly made.
Why Use PRO Software for Bad Debt Write-Offs?
✔ Automated Write-Offs – Ensures uncollectible invoices are handled systematically.
✔ Accurate Financial Records – Keeps receivables clean and up to date.
✔ Customizable Reporting – Allows easy tracking of write-offs for tax and accounting purposes.
✔ Streamlined Process – Reduces manual errors in financial adjustments.
Final Thoughts
By properly writing off bad debt in PRO Software Solutions, businesses can maintain accurate financial records while ensuring compliance with standard accounting practices.