Unpaid invoice for something not done - is this a bad debt?

Hi all,

I’m a web designer and I have some unpaid invoices for hosting - which is paid in advance - that was cancelled.

In these cases, I didn’t renew the hosting, but the unpaid invoices are floating about, since they are raised in advance of the renewal.

Do I mark those off as bad debts?

Similarly, I have a partially paid invoice for a custom template design, which is not likely to get paid now (the deposit was paid down toward it at the start). Do I write off the partially unpaid invoice as a bad debt? Although technically, the work stopped, so I haven’t incurred a debt myself.

Many thanks for any pointers

The appropriate option would be to raise Credit note for the balance remaining on the sales invoices , if you had done the work then this would be a bad debt.

for purchase invoices raised in advance and then nothing purchased then a debit note should be raised in the system to cancel out the purchase.



Thanks for your time Sam - that’s an excellent answer.

Best Regards

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