Mark an outstanding amount as uncollectable

Sometimes a client or debtor doesn't pay an invoice, or only pays part of it, and the invoice stays (partly) unpaid in your overviews for a long time. In Legalsense, you can write off the outstanding amount on such an invoice by marking it as uncollectable.

You might do this, for example, when the client has gone bankrupt, when you've agreed to settle for part of the amount, or when collecting the rest would cost more than it brings in.

Important: Only write off an outstanding invoice after investigation confirms no further payment is expected. We recommend discussing a potential write-off with your bookkeeper or accountant before you proceed.

Write off an invoice (partially or in full)

Once you no longer expect payment of the invoice, you can write off the outstanding amount as uncollectable.

1. Open the invoice in Legalsense.
2. Click Payments.

Invoice detail view with the Payments panel open, showing the Mark as uncollectable button.

3. Click Mark as uncollectable.
4. Click Yes to confirm.

Legalsense marks the invoice as uncollectable.

Invoice showing the uncollectable status after confirmation.

You write off a partially paid invoice the same way.

Integration with accounting software

Marking an invoice as uncollectable only changes its status in Legalsense. The write-off isn't sent to your accounting software, even if Legalsense is linked to it, so you also need to book the write-off there.

If your integration fetches payment statuses from your accounting software, Legalsense counts the amount you wrote off there as paid. The invoice then shows as Paid in Legalsense instead of Uncollectable.

Adding a payment to the invoice in Legalsense after the write-off also removes the uncollectable status. If the payment covers the remaining amount, the invoice shows as Paid. If not, the rest is outstanding again, and you can mark it as uncollectable again.

Reporting

Legalsense adds several reporting options for write-offs.

In the invoice list, you can search for all invoices with an uncollectable status.

Invoice list filtered to show invoices with an uncollectable status.

In the report builder, you can filter and group by payment status, including the uncollectable status.

Report with a filter on payment status, set to Uncollectable.

On the matter page, you can also see at a glance whether an invoice has been paid or marked uncollectable, by scrolling down all the way to the bottom to the Invoices section

Matter page showing the payment status of invoices, including one marked uncollectable.