When to write off a debt
Under ATO ruling GSTR 2000/2, a debt is "bad" — and you can claim the GST adjustment — once you have made a genuine commercial decision that it is unrecoverable. That usually means:
- The invoice is 12+ months overdue, and
- You have made reasonable collection attempts (statements, calls, a letter of demand), and
- The customer is insolvent, uncontactable, or has formally disputed the debt past resolution.
Writing off earlier than this is not wrong — but you need to be able to justify the commercial decision if the ATO asks.
How to write one off
From the invoice detail page, open the More menu and choose Write off as bad debt. You will be asked to confirm:
- The reason (free-text, becomes the journal narration)
- Whether to claim the GST adjustment now (default yes if you originally collected GST on the invoice)
On confirmation, OneBookPlus posts a two-line journal:
- Dr Bad Debts Expense for the GST-exclusive amount
- Dr GST on Sales for the GST portion (this is the negative adjustment claimable on your next BAS, in box 1A or 7A depending on basis)
- Cr Accounts Receivable for the gross invoice amount
The invoice status flips to Written Off and disappears from Aged Receivables and the customer statement.
Reversing a write-off
If the customer pays later — sometimes a debt collector recovers the money months down the track — open the same invoice and choose Reverse write-off. The original journal is reversed verbatim and the invoice returns to its prior state. You can then receive the payment normally.
Reversing also posts the GST back the other way, so the recovery shows up in your next BAS as a positive adjustment in 1A.
Reporting
The Bad Debts report (under Reports → Receivables) lists every write-off in a period with the customer, amount, GST claimed, and reversal status. Useful for year-end review and for explaining variance on your P&L (bad debts expense rolls up to the operating expenses block).