Steps for writing off bad debt in Broadlume Business Management Software The following sections provide the steps to take to write off a bad debt using the direct method.
Step 1: Have the customer ID and bad debt expense account number on hand.
Create a Credit Memo for the debt: From the Master Menu, navigate to Accounts Receivable > Customer Account Maintenance. The Function will default to Add; click Continue.
- Enter the Customer ID
- At Item Type, select Credit Memo
- Enter the Item Number (ex: BADDEBT2019)
- The Beginning and Current Balance must be negative
- Input a Reference for the Bad Debt write-off
- Select the G/L Account for Bad Debt
- When finished, click Save
- Hit the Esc key twice to return to the Accounts Receivable screen.
Step 2: Apply the Credit Memo to write off the bad debt:
1. Select Post Customer Payments, and click to select Customer ID.
2. Highlight and right-click or double-click to Select the Bad Debt Credit Memo in the Prior Payments and Credits box.
3. In the Invoice box, highlight and right-click to Apply the Credit Memo to the Invoice that is considered Bad Debt.
4. The system will prompt an Apply Payment to Invoice box. Click Continue. You can also highlight and double-click to Select to skip the Apply Payment to Invoice box prompt.
5. Click Accept to keep your changes. The system will then prompt a recap of the procedure you just performed. Click Yes to finalize.