How to Write Off Bad Debt in QuickBooks?
Sometimes, a user of QuickBooks accounting software may find that an invoice has become non-collectible. In such cases, he or she may declare it as bad debt. Now, this QB user needs to write off bad debt in QuickBooks. This will help the user to clear the non-collectible invoice from the accounts receivable and decrease by this amount the net profit.
Steps showing how to write off bad debt in QuickBooks
If you are looking for how to write off bad debt in QuickBooks, this article can provide you the required steps. Before you proceed with the QuickBooks write off bad debt procedure, you have to verify that your A/R Aging Detail report is not incorrect. For checking A/R Aging Detail report, firstly, you have to go to the Reports. Then, you have to go to Customers & Receivables. Under this, choose A/R Aging Detail.
Follow these steps to write off bad debt in QuickBooks –
Create a bad debt account
- First of all, go to the Lists menu in QB menu bar and click on it.
• Choose Chart of Accounts from the submenu items.
• You will see that Chart of Accounts window get opened.
• Now, do a right-click anywhere in the window.
• From the list that appears on right-clicking, select New.
• Add New Account window will get opened.
• Look for the Expense radio button and click on it.
• Click on the Continue button.
• Now, you have to put the account number.
• Type the word Bad Debt in the Account Name field.
• Finally, click on the save button and then on the Close button.
Record bad debt after bad debt account creation
- Go to the Customers menu.
• From the submenu items, select Receive Payments.
• Look for the customer responsible for the bad debt.
• You should make sure that the amount field is at 0.00.
• Look for the unpaid line item and highlight it.
• Now, click on the Discount & Credits button.
• You have to type the bad debt amount in a field under the Discount tab having the name - Amount of Discount.
• Open the Discount Account drop-down list.
• Among the items in the drop-down list, select the bad debt expense account that you have already created above.
• After this, click on the Done button.
• Finally, to record payment, click Save & Close.
If you are looking for how to write off an invoice in quickbooks or if you are facing problems while trying to write off bad debt in QuickBooks, you can contact certified QuickBooks experts at Accountant Squad by calling their toll-free QuickBooks Error Tech Support Number 1-888-502-0363. They provide 24 by 7 QuickBooks technical support.