Home » How to write off Bad Debt on QuickBooks Desktop

How to write off Bad Debt on QuickBooks Desktop

write off Bad Debt in QuickBooks Desktop

by Dharmendra123
How to write off Bad Debt in QuickBooks Desktop

Finishing a task can be difficult, and in this case, writing off bad debt on a QuickBooks desktop can be difficult as well. However, this article is here to assist you in writing off bad debt in QuickBooks. The following article will explain what bad debt in QuickBooks desktop means and how to do it. Here you will read about how to write bad debt on QuickBooks desktop and for more information like how to resolve data damage to QuickBooks and the need to upgrade to QuickBooks enterprise then click on these links.

What is write-off bad debt in QuickBooks desktop?

When you run a business, you will come across such annoying customers who refuse to pay their debts or you are unable to connect with them. In this case, the debt that they took becomes a bad debt and you must dispose of it in order to create new space and sort out accrual data.

How do write off bad debt on a QuickBooks desktop? 

To write bad debt in QuickBooks desktop, you must follow the two-step process outlined below.

Step 1: Navigate to the report tab > customers and receivables > open invoices report.

  • This window will show you information about customers in a specific group who are paying or resolving debts.
  • Find or search for the customer details/name whose data you want to delete or delete.
  • Make a note of the customer’s invoice number and the amount that needs to be cleared.

Step 2. Goto the customer center on your home screen> credit memos and refunds.

  • Enter the customer’s name and the date you want to dump the invoice or, in other words, write off the debt in the credit memos and refund popup. 
  • If you already have a specially made item named bad debt, close bad debt in the item.
  • If not, add a new item by selecting add new> other changes > name it bad debt > account- select bad debt general ledger > OK to save changes.
  • For easy sorting, write the company name of the bad debt customer or the invoice number in the description.
  • As the uncleared amount, enter the due amount or the amount mentioned on the invoice in the amount section.
  • If you are using the QuickBooks class tracker feature, select the preferred class and adjust the sales tax payable if your company keeps track of the sales tax payable, and this method, credit memos, and refunds is the only way to change the sales tax payable.
  • Close the credit memos and refunds window by selecting Save.

A QuickBooks popup notifying you about the remaining amount you need to receive from the customer and presents you with the following options: 

  • QuickBooks will provide assistance in relocating the debt.
  • Provide a refund or assist you in writing a check.
  • Use on an invoice.
  • Choose the third option > enter the customer’s invoice number > check it > click Done.
  • You will also be notified that the selected invoice has been written off. That is, it will not appear on your balance sheet or accrual, but will appear as a bad expense on your income statement.
  • This will result in a reduction in your income because the amount was not received or you did not receive it.

Read Also: How To Process Payments In The GoPayment App

You may also like

Leave a Comment