Advance payments write off

1

I have some members claiming that their current year annual subs payments are in fact in advance for next year. As our accounts for previous years did not record or carry forward these liabilities we need to make a decision to either not accept the claims or write them off in our accounts this year.

How should I correctly record this write off in this years subs accounts as the invoice issued will not be paid. These are not bad debts but previously absorbed liabilities.

2

You could:

  1. you could just delete the invoice as they shouldn’t have been created - which means there is no future record.
    2a) if you have the Credit Note tab activated - create a Credit Note reversing the invoice, or
    2b) if you don’t have the Credit Note tab activated - create a Journal Entry reversing the invoice.