cancel
Showing results for 
Search instead for 
Did you mean: 
ljw
Active Member

How do I write off a credit balance for a customer?

 
Solved
Best answer 12-10-2018

Accepted Solutions
Highlighted
Active Member

First of all a word of warning.  I am not sure where you...

First of all a word of warning.  I am not sure where you are located, but most states in the US have what are called Escheat Laws that technically say you can't write off customer over payments without some real reason to do so and after so long if the customer does not use it then you need to remit it to the state.  You can Google Escheat or Escheatment Laws for your state to learn about the requirement.

With that said, people often do write of balance for many legitimate reasons.  I would have a non-inventory item set up that goes to the correct income account you want it to go to.  For example, misc income or something like that.  Invoice the customer for that item setting the amount to the amount of the credit you want to write off.  Go to receive payment from customer, select that invoice you just set up and then apply the credit to net the two against each other.

Hope that helps.

3 Comments
Highlighted
Active Member

First of all a word of warning.  I am not sure where you...

First of all a word of warning.  I am not sure where you are located, but most states in the US have what are called Escheat Laws that technically say you can't write off customer over payments without some real reason to do so and after so long if the customer does not use it then you need to remit it to the state.  You can Google Escheat or Escheatment Laws for your state to learn about the requirement.

With that said, people often do write of balance for many legitimate reasons.  I would have a non-inventory item set up that goes to the correct income account you want it to go to.  For example, misc income or something like that.  Invoice the customer for that item setting the amount to the amount of the credit you want to write off.  Go to receive payment from customer, select that invoice you just set up and then apply the credit to net the two against each other.

Hope that helps.

ljw
Active Member

these are credit balances that we are not 100% sure are l...

these are credit balances that we are not 100% sure are legit credits due to possible duplicate CMs, high turnover of personnel, and well over one year
Active Member

Like I said there are definitely reasons to write off old...

Like I said there are definitely reasons to write off old balances.  Also, I know that many states that are looking for additional revenue have been going after these old credit balances and did not want you to say I did not mention that.

If it was me, especially if the amounts are not material I would simply clean them up as I said above coding them to misc income so you have a clean sheet to start with going forward.