Skip to main content

Notifications

Small and medium business | Business Central, N...
Suggested answer

How to write off a customer's credit balance

Posted on by 57

We have a customer who has a $55 CREDIT balance that they are not going to use and we do not want to refund it.  How do we clear the credit?.  

  • Suggested answer
    YUN ZHU Profile Picture
    YUN ZHU 73,171 Super User 2024 Season 2 on at
    RE: How to write off a customer's credit balance

    Hi, create a dummy invoice in Sales Journals, post it, then apply the balance in Customer Ledger Entries.

    Whether you refund it, or cancel it using other ways, the records will be left in the system.

    pastedimage1675831553127v1.png

    Hope this helps as well.

    Thanks.

    ZHU

  • Suggested answer
    Inge M. Bruvik Profile Picture
    Inge M. Bruvik 32,748 Super User 2024 Season 1 on at
    RE: How to write off a customer's credit balance
    [quote user="DebbieCOH"]

    This customer has a $55 CREDIT balance they are not going to use and we do not want to refund.  We want to clear this credit balance of the customer's account.  I'm not understanding how your reply relates to my question.

    And...we are in the USA.

    [/quote]

    You have to create a line where you credit the G/L account you want to use for the loss and debit the customer in question with the amount of 55$.

    The you will zero out the transaction on the customers account and the 55$ will be recorded as revenue. 

  • Suggested answer
    Dallefeld Profile Picture
    Dallefeld 11,425 User Group Leader on at
    RE: How to write off a customer's credit balance

    Through a journal, you can create an entry to the customer (document type blank or invoice) with a balance account number of the desired general ledger account for the writeoff. Be sure to use the Apply Entries, and apply this entry to the credit(s) on the account.

  • DebbieCOH Profile Picture
    DebbieCOH 57 on at
    RE: How to write off a customer's credit balance

    This customer has a $55 CREDIT balance they are not going to use and we do not want to refund.  We want to clear this credit balance of the customer's account.  I'm not understanding how your reply relates to my question.

    And...we are in the USA.

  • Inge M. Bruvik Profile Picture
    Inge M. Bruvik 32,748 Super User 2024 Season 1 on at
    RE: How to write off a customer's credit balance

    There are basically two ways you can do that and the best approach is also dependent on the accounting regulations in your country.

    You can either create a credit memo against the original invoice og you can post a transaction in a journal where you credit the customer account and debet a G/L account for "Loss on accounts receivables".

    In a journal you will then use no document type, customer as account type for the credit transaction and G/L as account type for the debit transaction.

    In my country it is mandatory to use the loss on A/R approach if collection of the outstanding amount fails.

  • DebbieCOH Profile Picture
    DebbieCOH 57 on at
    RE: How to write off a customer's credit balance

    Thank you BUT we do not want to refund the credit, we want to clear it, write it off.

  • JodeRuiter Profile Picture
    JodeRuiter 976 User Group Leader on at
    RE: How to write off a customer's credit balance

    It's a great question and an easy answer.

    Typically, in BC Money in is always a Cash Receipt, no matter the source and Money Out is a Payment Journal (typically).

    The ability to refund a customer is built right in, so go to a Payment Journal and in Document Type choose Refund.

    The Account Type would then be a customer, pull up the customer you wish to refund and then go to Process>Apply entries and find their Credit or Payment you wish to Refund and then cut the check or send the ACH!

    Boom, you are good. 

    Let us know if you have any questions:

    pastedimage1675775795145v1.png

Under review

Thank you for your reply! To ensure a great experience for everyone, your content is awaiting approval by our Community Managers. Please check back later.

Helpful resources

Quick Links

December Spotlight Star - Muhammad Affan

Congratulations to a top community star!

Community AMA December 12th

Join us as we continue to demystify the Dynamics 365 Contact Center

New! Quick response templatesâš¡

Save time with the new custom templates!

Leaderboard

#1
André Arnaud de Calavon Profile Picture

André Arnaud de Cal... 291,151 Super User 2024 Season 2

#2
Martin Dráb Profile Picture

Martin Dráb 229,993 Most Valuable Professional

#3
nmaenpaa Profile Picture

nmaenpaa 101,156

Leaderboard

Featured topics

Product updates

Dynamics 365 release plans