Occasionally, customers may be unable or unwilling to pay outstanding balances. To maintain accurate accounting records, these amounts may be written off as Bad Debt.

HITS provides a straightforward process to remove unpaid balances from Accounts Receivable (A/R) while maintaining a clear record for reporting and auditing.

This guide will walk you through:

• • Creating a credit memo to remove a customer balance
  • Applying the credit as a bad debt write-off
  • Running reports to track all write-offs
  • Best practices and permission requirements

 

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Steps

1.) Access Bookkeeping View to Create a Credit Memo

Go to Views > Bookkeeping, then click the Credit icon. (Some sites navigate via Received on Account > Add/Edit to reach the same screen.)

2.) Choose the customer

Use the binoculars next to Customer # to look up and select the correct customer.

3.) Click the Summary tab and verify the amount you will be writing off

Confirm the customer’s total A/R balance (this is the exact amount you’ll credit).

4.) Enter the write-off credit

• • Return to the Main tab
  • Enter the Credit Amount (the total to be written off)
  • Set the Description to a consistent keyword like BAD DEBT/WRITE OFF
  • If your system uses ROA Dept Type: Set ROA Dept = BAD DEBT (BD) (see ROA Department Types)
  • If your system uses Payment Type: Select the BD Credit Card Code (must be added to Credit Card Codes to represent Bad Debt)

5.) Apply the credit

Click Create Credit & Apply to auto-disperse across all open items (use Create Credit only if you need manual dispersal), this will print you to the Payment View/Edit screen.

6.) Print the Credit to finalize.

7.) Report on write-offs

• Go to Views > Reports > A/R > A/R Transactions

• Set Date Range (e.g., This Year) → (optional)
• Credits only (optional)
• Apply one of the following filters:
  • If using ROA Dept Type: Filter on A/R Dept = BD
  • If using Payment Type: Filter on Credit Card Code = BD
• Or filter on Keyword = the exact description (e.g., WRITE OFF)
• Click Run Report.

 

 

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Best Practices

• • Consistency: Always use the same description keyword (BAD DEBT or WRITE OFF) for tracking.
  • Review Before Write-Off: Verify balances carefully in the Summary tab.
  • Permissions: Ensure users have the required permissions to post credits and run reports: P17, P85, P57 (reference Permission Switches)
  • Audit Trail: Use reports regularly to review write-offs and monitor patterns in unpaid balances.