Bad debt: deciding when to stop chasing and write it off
A bad debt is money you have decided not to collect. When to make that call, what the write-off actually involves, and why carrying it costs more than losing it.
What every invoice must contain, how to number them, and the small details that get you paid faster.
An invoice is a request for payment that also serves as an accounting record. At minimum it needs: the word “Invoice”, a unique number, the date, who is billing whom, what is being charged for, the amount with tax shown separately, the payment terms and the payment details. Miss one of those and you give the client a reason to delay.
Everything else — a logo, a thank-you note — is optional. What genuinely changes how fast you are paid is clarity about the amount, the due date and how to pay.
Ask, once, who handles payments and whether they need a purchase-order number. An invoice missing a PO number is often silently parked until someone chases it.
Ettex Invoices covers the routine part: line items, statuses, PDF export, duplicating last month’s invoice for a recurring client, and a view of what is still unpaid. Amounts use the workspace currency, so the same setting applies across invoices, bookkeeping and the CRM.
Requirements differ by country. In many places an individual can invoice for work, but tax registration thresholds and what must appear on the document vary — check the rules where you are.
Do not edit it quietly. Issue a corrected invoice or a credit note referencing the original number, so the trail stays intact.
Only if the terms were agreed in advance — in the contract or on the invoice before it was due. Adding a penalty afterwards rarely holds up.
Most jurisdictions require several years, commonly five to seven. Keep them as PDFs somewhere you control, not only inside a tool you might stop using.
A bad debt is money you have decided not to collect. When to make that call, what the write-off actually involves, and why carrying it costs more than losing it.
An aged debtors report groups what you are owed by how late it is. How to read the columns, which movement matters, and the mistake of looking only at the total.
Payment terms set when money is due, what happens if it is late, and when the clock starts. Which terms are worth negotiating and which are quietly ignored.