How to write off unpaid invoices (Bad Debts) for a customer.
Create an new journal entry with the first line being a credit to accounts receivable for the amount that the customer owes.
Select the customer's ID from the dropdown under "Name".
The second line should be a debit to the Bad Debts expense account.
Post the journal entry.
The journal entry can now be applied to the unpaid invoice(s) by selecting the invoices from the list that appears after clicking "Post". Clicking "Cancel" will allow the journal entry to post without applying it to any outstanding invoices.
Next click "Finish". This will automatically create a receivable to apply the journal entry and unpaid invoices against each other.