Quick summary
Writing off a bad debt in Xero involves creating and applying a credit note against an unpaid invoice so it is removed from your accounts receivable. This process uses Xero's built-in credit note workflow to keep your books accurate without deleting the original invoice.
Steps
- On Xero's main dashboard, head over to the top menu bar and click 'Business'.
- Choose 'Invoices' from the list of options.
- Tap the 'Awaiting Payment' tab to filter unpaid invoices.
- Find and open the specific invoice you already consider a bad debt.
- Click the 'More Options' button at the top-right corner of the invoice.
- Select 'Create and Apply Credit' from the dropdown menu.
- Review the credit note details and make any necessary modifications.
- Click 'Approve' to confirm and process the credit note.
- The invoice is now written off as a bad debt in Xero.
