Recording Bad Debts in Numia

In a perfect world customers would pay their invoices in full and on time. Unfortunately not every customer is perfect and, despite even the most air-tight credit policy, a start-up will have to learn some of the accounting rules behind bad debts.

If your company keeps records on an accrual basis, you’ve already recorded income when a job is completed and invoiced, even though you haven’t yet received the payment from your customer. So when you discover that the customer isn’t going to pay, you need to offset the income you recorded with a bad debt expense.

Here are few steps for Numia

> In the Receive Payments page select the customer from whom you can't collect
> Select the particular invoice which is to be a bad debt
> Select the option Bad Debts for that invoice
> Dont select the options Deposit this amount into, Group with Undeposited Funds
> Click on the Submit button

If you want to avoid any kind of bad debt there can be absolutely NO allowance for procrastination in your invoicing and collections process. Now I hope so that you understand how to record a bad debt.