If you have a long term outstanding invoice for a customer and need to remove the item from your receivables and declare it a bad debt you can do this through the Receivables form. You will want to find the customer in question and select your Bad Debt Expense account as the deposit account. You still want to leave the accounts receivable account in place. You then select the outstanding invoice and enter in the amount of the Bad Debt. This will remove the transaction from the Receivables, update your accounts receivable account and enter that amount of money in your Bad Debt Expense account clearing the transaction.