You made a sale, but the customer has not paid the debt owed to your company. This will make the original invoice to go unpaid and will create a “bad debt.” Before you decide to record a bad debt, you should create a “bad debt account” to keep track of any such transactions. This action will help you to Write-Off Bad Debts in QuickBooks Online and use the Discounts and Credits option within QuickBooks. The debt will be recorded in this separate account, and this info will help you while doing taxes.
When the invoice is voided, then reopen it and enter “bad debt” in the memo and select “Save.”
Now issue a “Credit Memo” to the client:
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