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664 votes
Hi community, we appreciate this idea has collected a fair amount of votes and commentary. This has all been feedback and taken seriously by our product teams.
Currently, there are ways to record a bad debt in Xero, depending on your tax registration status and how you want the transactions to be recorded in your reports - We have help for this on Xero Central you can draw into.
We don’t have any plans in the near term to expand functionality to develop a button to write off invoices or bills as 'bad debt'. If anything changes in this space, we’ll update you on this idea!
Tommy Boisvert
supported this idea
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5 votes
An error occurred while saving the comment Tommy Boisvert
supported this idea
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It's currently not easy to add nondeductible expenses in Xero. Those are expenses that will not reduce the net income, and will not reduce any tax liability. An example is a political contribution, or a donation to a person or an organization that is not officially recognized as a charitable organization (i.e. no tax receipt). And they are not expenses made to earn more revenue. Xero could add a new Account Type in the chart of accounts, something like "Non-deductible Expense", and when a transaction is recorded against this type of expense, all the underlaying accounting transactions would happen automatically behind the scenes. Like when we add a bill or an invoice... all related transactions are done by Xero. Having an account like that in the chart of accounts, that would make it very easy for all Xero users to record nondeductible expenses. Currently, we need to write manual operations and to involve an accountant to know how do manage these transactions. This new account type would be a great improvement to make Xero more accessible to everyone.