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How to account for an invoice write-off?

A vendor did work for a charity and billed them for it.

The vendor then decided to “gift” that amount to the charity so that the charity no longer owed the money for it.

How would one account for the original invoice?

I thought I might be able to update the invoice to include a discount so it balances out at 0, but the system produces an error which says, “The value of the purchase must be greater than zero.”

Any thoughts?

Hi @fambi

As the invoice has zero value, it has no relevance in terms of your accounts.

As it was gifted to a charity, it may be best to speak to your accountant to ensure it’s recorded correctly. It may be the case that it would need a credit note, but your accountant would be able to confirm this.

Thanks @QFMathew

I just found this explanation which seems correct:

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