Pay Later - how to write off a bad debt

From time to time you may find that a customer will not honour a pay later agreement and fees accredited to this will remain outstanding unless otherwise accounted for.

This is the method we recommend for handling this situation: 

1.  Create a new GL code with the name "Bad Debt" with the real bad debt GL code in their chart of accounts.
   
2. Place a credit note against the original Pay Later receipt for the outstanding value. Use something like POS [which is for Point of Sale] as the Payment Type as obviously cheque/credit card/cash cannot be used as these will become part of the end of day takings and would throw out your totals if used. Use the new GL code Bad Debt on the credit note.