Dynamics Community Forum Thread Details

Scenario

I have a customer invoice for $1,082.50.
The customer paid only $1,000, and the remaining $82.50 will not be received (to be treated as bad debt / write-off / discount).

What I Did in Cash Receipt Journal

Posted a customer payment of $1,000 to the bank account.
Added a second journal line for $82.50 to a G/L account (Bad Debt Expense).
Applied both lines to the same customer and invoice using Apply Customer Entries.

Both lines are marked as Applied = Yes.

What I Am Expecting

The invoice should be fully paid and closed
Customer should have no remaining balance
Bank account should reflect only $1,000 received
The $82.50 should be reflected only as an expense (bad debt / write-off)
No open amount should remain on the customer ledger

What Actually Happens After Posting

Business Central still shows $82.50 as remaining amount on the invoice
Customer ledger indicates the customer still owes $82.50
Even though:
- The bank received only $1,000
- The $82.50 is already posted to a G/L expense
- Both lines are applied to the customer

The Gap / Issue

From an accounting perspective:

The customer does not owe the remaining amount
The loss is already recognized in P&L

But from a system perspective: Business Central still treats the invoice as not fully settled

Looking for guidance on:

Whether this is the expected standard behavior or am I making any mistakes?
Or if there is a recommended setup / posting method to fully clear the invoice while correctly recording the write-off, without impacting bank reconciliation.

Appreciate insights from anyone who has handled short payments or customer write-offs in Business Central.