LifeinAsia - 4:51 pm on Jan 22, 2008 (gmt 0)

you will not be able to write-off the loss.

Since the OP is most likely on a cash basis, there is no "loss" to write off. Cash basis businesses only count revenue when they receive it. Since no revenue was received for this project, there can be no loss. Any valid expenses that would be deducted against the revenue would be deducted as normal (against all revenue).

Also, take the friend issue out of the equation- business is business. If you want to jeapordize your friendship, you can ask him to get involved in trying to get the sister to pay. If you want to keep the friendship, don't bring up the subject. Most likely, he already feels bad enough that he subjected his friend to his scheming sister. (And if he does NOT, then how much do you really value that friendship anyway?)

Your client signed the proposal, took delivery of the finished project, and used it. Invoice is due (and should have been sent at project completion). Period. Out of niceness and trying to help out a client, you allowed the client to postpone payment. However, the original bill is still due.

I would suggest another invoice with an added warning that unpaid balances after a certain date (e.g., 15 or 30 days after the invoice date) will accrue late fees and interest (what interest you can charge may be subject to local usery laws).

[edited by: LifeinAsia at 4:58 pm (utc) on Jan. 22, 2008]