Selecting this option to will flag the applied payment as a write off due to bad debt and works very similar to the write-off feature.

 

•When bad debt payments are applied to an account, a check/reference number is not required.

 

• Payments made using this method will carry a reference of BD-DEBT.

 

•The payment amount will not be included in the batch total.

 

•The Cash Receipts report will include a separate column listing the bad debt amounts.

 

•The Deposit Slip will not list the transactions since no monies were actually received.

 

•When applying a bad debt receipt, The A/R general ledger account will be credited (reduced) and the Bad Debts general ledger account will be debited (increased).