How to close a short-paid sales invoice right

In Business Central, when you have a small remaining balance (like that $5 gap) and you know the customer won't be paying it, you essentially need to "write it off." You don't want to leave the invoice open forever, but you also don't want to fake a payment.

Here are the two most common ways to handle this:

1. The "Payment Tolerance" Method (Best for small gaps)

If this happens often, Business Central has a built-in feature called Payment Tolerance. If the $5 falls within a specific percentage or flat amount you've pre-defined, the system will automatically close the invoice and post the difference to a "Payment Tolerance" account.

• How to use it: When posting the $95 payment in the Cash Receipt Journal, the system will see the $5 difference. If it's within your allowed limit, the invoice closes fully.

2. The "Payment Discount" Workaround

If you haven't set up Payment Tolerance, you can manually treat the $5 as a "Payment Discount," even if the discount period has technically expired.

1. Go to the Cash Receipt Journal where you recorded the $95.

2. Before posting, go to Apply Entries.

3. On the line for the $100 invoice, manually change the Remaining Pmt. Discount Possible field to $5.

4. Ensure the Pmt. Discount Date is set to today's date so the system recognizes it.

5. Post the journal. The $95 hits the bank, and the $5 hits your "Sales Discounts" G/L account.

3. The "Journal Write-Off" (Most Direct)

If the payment is already posted and the invoice is sitting there with a $5 "Remaining Amount," you need to clear it manually.

1. Open a General Journal.

2. Document Type: Leave blank.

3. Account Type: Customer.

4. Account No.: Select the Customer.

5. Amount: Enter 5 (positive, to increase the "payment" side).

6. Bal. Account Type: G/L Account.

7. Bal. Account No.: Select your Bad Debt or Miscellaneous Expense account.

8. Use Applies-to Doc. No. to select that specific invoice.

9. Post.