What I have done for several clients is: create an A/R type account (sub-account of A/R) in the COA called A/R Doubtful. When a receivable is getting old, I open the invoice and select the A/R Doubtful account instead of the A/R. This effectively moves the transaction out of the main A/R and is easily identifiable. At yearend, if you are 100% certain that payment is not forthcoming, create the credit memo using the Bad Debt item and notify your Accountant that everything in the Bad Debt Account is to be written off.