When the customer doesn't pay

When a customer doesn't pay, and you think the money will never come, don't credit the invoice. Remind, send it to debt collection if it is worth it, and once the loss is confirmed, write it off with Write off. The income stays, the customer still owes, and your accountant gets the loss in the Accounting period.

Credit or write off?

A credit note corrects a sale that was wrong: a lesson that was not given, a wrong price, or a reduction you agreed with the customer. If the customer got what they paid for but doesn't pay, the sale isn't wrong. Then you write the invoice off.

This is more than a formality. A credit note tells the customer they owe nothing, so the claim can no longer go to debt collection. Under good accounting practice, a credit note must not be used to document a loss on a customer either.

A written-off invoice can't be credited. If the sale turns out to have been wrong after all, reverse the write-off first (see below).

First: remind and send to debt collection

Before you write off, do what you can to get the money.

1. Send reminders. With three reminders and six months past the due date, you have grounds to write off, even without debt collection.
2. Send the claim to debt collection, if you use it and the amount is worth it. The agency sends its own debt collection notice.
3. Write off once one of the grounds below holds.

How to set up the reminder plan and send to debt collection: Payment reminders and debt collection.

When can you write off?

A loss is confirmed when one of these holds. They are the conditions the Norwegian Tax Administration uses, and you choose the one that applies when you write off.

• Unpaid six months after the due date: the invoice is not paid six months after the due date, although at least three reminders were sent.
• Debt collection or enforcement failed: the debt collector or the enforcement officer closed the case without the money coming in.
• Bankruptcy with nothing for the claim: the customer is bankrupt, and the estate has nothing for this claim.
• Other circumstances: something else makes it clear the money will not come.

You must be able to show what supports the grounds if anyone asks. The due date and the reminders are in the invoice's history in Bookingleaf. Letters from the debt collector or the trustee you keep yourself.

How to write off an invoice

1. Open the invoice under Orders → Invoices.
2. Click Write off, beside Credit.
3. Amount written off shows what is open on the invoice. The whole amount is written off. If the customer has paid part of it, the rest is written off.
4. Choose the Grounds.
5. Write a Note on what supports the grounds, for example the debt collector, the case number and the date the case was closed.
6. Click Write off invoice, and confirm.

If you choose Unpaid six months after the due date, Bookingleaf shows the due date, the date six months after it, and the reminders sent. The note is then optional. If six months have not passed, or fewer than three reminders were sent, you get a warning. You can still write it off, but check that the grounds hold, or choose others. If you reminded outside Bookingleaf, by letter for example, say so in the note.

The other three grounds need a note.

Only owners and administrators can write off.

What happens when the invoice is written off?

• The invoice shows Written off, on the invoice, in the invoice list, on the contact and in Overdue invoices. In All invoices you find them with the Written off filter.
• It gets no more reminders.
• The income stays, and the loss is recorded today. The write-off is dated today, so it never lands in a period you have already sent to your accountant.
• The customer still owes the amount. The customer sees the invoice as unpaid, and KID and the payment page work as before. The write-off is for your accounts, not a message to the customer.

What your accountant gets

The write-off is in the Accounting period for the period it was made in, under Write-offs with their documentation: the invoice, the customer, the dates, the amount, the grounds, the note and the reminders sent. It is not a payment, and is not part of Total paid.

If the sale has VAT, the list shows the VAT share of the amount. Whether and when output VAT is corrected is up to your accountant.

If the customer pays after all

Register the payment as usual, or let it come in with KID. The write-off reverses by itself by the amount that came in, dated that day. Your accountant sees the reversal in the Accounting period.

Was the write-off a mistake?

A write-off is never removed. If it was a mistake, reverse it:

1. Open the invoice and click Write off.
2. Click Reverse write-off.
3. Choose The write-off was a mistake, for example because it was the wrong invoice, or the customer has agreed to pay after all. Add a note if you like.
4. Click Reverse write-off.

The amount is open on the invoice again, dated today. Afterwards you can send reminders, credit and set off the invoice again.

Do you want to drop the claim?

If you give the customer a reduction because something was wrong with what they bought, after a complaint for example, credit the invoice.

If you want to let the customer off for other reasons, Bookingleaf has nothing of its own for it yet. Until then, do this:

1. Open the invoice and click Register payment.
2. Choose Other under Paid with, and write in What was the payment? that the claim is dropped, for example "Dropped, no payment. Agreed with Ola 26.10."
3. Tell your accountant.

The customer then sees the invoice as paid. In the Accounting period it is among the payments, but no money came in, so your accountant must record it as a loss or a forgiven debt, not against the bank.