Create a new regular client invoice that matches the setup of the advance bill (same Client, Amount, Project, etc).
- Add a Line on the new invoice for the amount of the Advance. Populate the GL Account to a Sales Account (remember the account used).
- Apply this new invoice to the advance bill. This will reduce the Unapplied Amount to $0. Post the invoice.
- Open the Advance Bill. Make sure it's Posted. Then click on Write Off.
- A new invoice will appear with the line going to your bad debt account. The open amount of the advance is now reduced to $0.
- Change the GL Account to match the account used on the new invoice from step 2. Post the invoice.
- You are now done. Ensure all three invoices are posted for these to reflect on your Financial Reports.
Please review Advance Bill Invoices for further details regarding this topic.