The methodology is a little different for each case. Where they have not paid the full amount of the invoice without your acquiesence, then you would generally regard the unpaid amount as a bad debt. In a direct write off, you would create an "Expense:Bad Debts" account and you would credit the Account Receivable account by the amount of the write off and debit the Expense:Bad Debts account by the amount of the write off. Your income is unaltered at the amount recorded on the invoice and you are compensated by t the reduction in your Profit ( and hence taxable income) by the amount of the bad debt. The receivable in the form of the invoice is still active and you are still legally entitled to collect on the debt. If the customer eventually paid you at some time later, you would create a transaction for the Bad Debt entry between Expenses:Bad Debts and Accounts Receivable at the time you receive the money and record the payments as usual. Depending on whether your accounting is on an accrual or cash basis you may need further adjustments. There are a number of ways of accounting for bad debts other than a direct write off where this is a regular feature in your business operations and you really need accounting advice if you need to implement them.
if you agree to reduce the invoice amount, you could unpost the invoice, alter it appropriately and then repost it. This however does not record that you have offered the client a discount on the original agreed price. An alternative would be to treat it as a discount on the sale. In this case, you would use a contra account to your :Income:Sales Revenue account i.e. "Income:Sales Revenue:Sales Discounts". To record the discount, you would credit the Accounts Receivable for the amount of the Discount you are applying to the invoice and debit " Income:Sales Revenue:Sales Discounts" for the amount you are discounting the invoice by. Again the Invoice remains at its original value and in this case your income is adjusted by the amount of the discount. The above are possible accounting treatments. Whether they are allowable will be jurisdiction dependent and you should seek local accounting advice as to whether the above approaches or another methodology is applicable for the reporting arrangements you need to comply with. ----- David Cousens -- Sent from: http://gnucash.1415818.n4.nabble.com/GnuCash-User-f1415819.html _______________________________________________ gnucash-user mailing list gnucash-user@gnucash.org To update your subscription preferences or to unsubscribe: https://lists.gnucash.org/mailman/listinfo/gnucash-user If you are using Nabble or Gmane, please see https://wiki.gnucash.org/wiki/Mailing_Lists for more information. ----- Please remember to CC this list on all your replies. You can do this by using Reply-To-List or Reply-All.