How to Write Off a Bad Debt in Xero

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

1. On Xero's main dashboard, head over to the top menu bar and click 'Business'.
2. Choose 'Invoices' from the list of options.
3. Tap the 'Awaiting Payment' tab to filter unpaid invoices.
4. Find and open the specific invoice you already consider a bad debt.
5. Click the 'More Options' button at the top-right corner of the invoice.
6. Select 'Create and Apply Credit' from the dropdown menu.
7. Review the credit note details and make any necessary modifications.
8. Click 'Approve' to confirm and process the credit note.
9. The invoice is now written off as a bad debt in Xero.