It's a pleasure to see you in Community. Welcome! QuickBooks Online understands that having unpaid invoices can become concerning. Writing them off as 'bad debt' helps keep your accounts up to date. I'd be glad to assist!
The best course of action is to create an expense account for the bad debt, then create a non-inventory item. Here's a helpful guide for your reference. With regards to the associated sales tax, I encourage you to reach out to your accountant for their expertise. If you don't have an accountant, we can help you locate a ProAdvisor in your local area.
If you have any other questions, please don't hesitate to reach back out. We're always happy to help!
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