Applying a credit memo to an outstanding customer invoice

The final step in writing off bad debt is to remove the open invoice from accounts receivable. This is accomplished by applying the credit memo you created in the previous section to the open customer invoice. 

Follow these steps to apply a credit memo to an outstanding customer invoice:

1. Click the +New button and select Receive payment, as shown in the following screenshot:

2. On the next screen, a list of unpaid invoices and open credit memos will be displayed for the selected customer:

In the preceding screenshot, we have selected the invoice that needs to be written off (Invoice # 1007) and below that, we have selected the credit memo to apply (Credit Memo # 1006). Save your changes to record the bad debt as being written off.

3. After saving your changes, go back to the invoice dashboard, as shown in the following screenshot:

As we can see, invoice #1007 now shows the status of Paid. This paid status...