Writing Off Bad Debt May Be Good For Your Limo Anywhere . . . and Your Bottom Line
- Posted By: Limo Anywhere
- Tags: Bad Debt, Business Owner, Invoice, Limo Anywhere, Limo Anywhere Tips, Outstanding Invoice, Past Due, Small Business, Tax, Taxes
Sometimes unintended consequences can be a good thing. Recently, Limo Anywhere customers with a high volume of open invoices in their system were affected by a bug. We quickly deployed a fix, but the situation got us thinking about old invoices on a larger scale.
Most of the companies affected by the bug had invoices that were two to five years old. You’d probably agree that the chances of collecting on invoices that old are slim at best. Why not write off those invoices as bad debt? You’ll get them out of your system and improve Limo Anywhere’s operation, and you might be able to write the bad debt off on your taxes. Be sure to consult your tax professional or accountant to determine if this is the right course of action for your business. If it is, here’s how to take care of the old invoices in Limo Anywhere.
- Go to My Office>List Management>Payment Methods.
- Add the payment method “Bad Debt.”
- Go to Receivables and Open Invoices.
- Identify the invoice to write off and pay the invoice with the new payment method “Bad Debt.”
- After you have processed all of your old invoices, run a Transaction History Report for invoices with the payment method “Bad Debt.”
- Send the report to your accountant or tax professional.
What happens if you are able to collect on one of these invoices in the future? Simply reverse the payment and process as usual. Either way, it’s a win/win: your Limo Anywhere will run better, and you may reduce your taxes.