This article describes how to write off bad debt. You may need to write off charges when you know you cannot collect payment on them.
Setup for write-offs
If your system does not have a GL account and a charge code for write-offs, you have to create them.
GL Account for Write-Offs
Go to Admin > GL Account > Add New.
Create a new GL account for write-offs. An example is shown below.
The Write-Off Account is a Contra account but should be set up with a Normal Balance of Credit. This ensures that write-offs appear as a negative number on the Income Statement.
Charge Code for Write-Offs
Go to Admin > Charge Code > Add New.
Create a new charge code for write-offs, linked to the GL account for write-offs. An example is shown below.
In the Account field, select the write-off GL account.
To write off bad debt
Open the tenant record.
Note: If the tenant has moved out, and has a Status of Past, they are not shown in the default list of tenants. To locate their record, you have to open the filter, select Past in the Status field, and then click Apply.
On the Tenant screen, verify that there is an outstanding charge to write off.
Click Add Charge.
Select the Write Off charge code and enter a negative amount. The amount should be the same as the outstanding charge.
Click Save.
In the Tenant screen, click Receive Payment.
Breeze opens the Receipt screen, displaying the negative charge and the outstanding charge.
Click Save.
Breeze creates a Zero Receipt to link the two charges.
The outstanding charge is now "paid off" and is no longer counted as open AR.