how do I record a goodwill write-off of an unpaid invoice?

Hi accounting126,

That's so wonderful that your company gives back in his way. QuickBooks Online lets you individualize your account to fit your business. I can give you a couple of options.

There are a couple of options on how to record this. You could create an account for goodwill and write it off like you would a bad debt as the article explains; Write off a Bad Debt in QuickBooks Online.

The next option is to reduce the invoice amount with a discount. To turn on the discount option, follow these steps:

1. Click the Gear icon.
2. Select Account and Settings.
3. Click the Sales tab.
4. Click the pencil icon under Sales form content.
5. Check the box next to Discount.
6. Click Save and Done.

Use the discount field on an invoice.

1. Select + New.

2. Select Invoice.
3. Add products and services, and fill out the rest of the form.
4. Select Discount percentage or Discount value to enter the discount as a percentage or an amount.
5. Enter the amount you want to discount in the discount field.
6. If you want to discount the total before calculating sales tax, select the arrow next to the discount field.
7. Click Save and close.

The final option is to set it up as a product by following these steps:

Create a discount item

1. Select Settings and then Products and Services.
2. Select New.
3. Select Non-inventory or Service for the type.
4. Name the item Goodwill.
5. In the Sales price/rate field, enter the discount as a negative amount. Keep in mind. This is a dollar amount and not a percentage.
6. From the Income account drop-down menu, select the Discount given account. QuickBooks creates this account for you when you turn on the discount feature.
7. From the Sales tax category drop-down menu, select Nontaxable.
8. Click Save.

Add the discount to an invoice or sales receipt

1. Select + New.
2. Select Invoice.
3. Add products and services, and fill out the rest of the form.
4. Add the Discount item you just created. You can adjust the discount if you need to; make sure it's a negative amount.
5. Click Save and close.

If you're still unsure how you would like to record this, I recommend contacting your accountant. They'll be able to advise you as to what'll fit best with your company. If you don't have an accountant, you can find one familiar with QuickBooks through this link: Find an Accountant.

Feel free to reach back out if you need a helping hand. Have a great evening!