QuickBooks: Write Off Bad Debt

Bad debt referred to the customer who owes you an amount, but you can’t receive it. You require recording that money as a bad debt and then writing it off to keep your account up-to-date.

In case you start to feel like you cannot collect money from a customer, it’s time you write off the bad debt. We will explore a few ways below to manage bad debt.

Go through the list provided below to pick the method that is applicable to your situation:

When you are using the Cash Basis Method

If the taxes are filed on the cash basis, the right manner to remove amount due which is uncollectible is to either void or delete the invoices that are open, as they were not reported as income.

  • Go to the menu and choose Sales/
  • Go to the top and choose
  • Now, opt for Customer’s Name.
  • Go to You will see the drop-down next to it, select Open Invoices.
  • Now go to Date, pick a date range from the drop-down list.
  • Select all of the invoices one by one (For which you wouldn’t be getting the payment).
  • The invoice will open up. go to the bottom left and select More>Void.
  • You will see a question- Are you sure you want to void this?, select
  • For each invoice, go from step 4 to step 6.

Once the Invoice has been voided, open it again and enter ‘Bad Debt’ (enter any other information you want to, including the Original Amount.) in the memo, following the word ‘Voided”. Now Save it.

If you want to ensure that the client is a bad debt entity, make a note of it:

  • Go to the Menu and select Sales or
  • Go to the top and choose
  • Pick the Customer’s Name and Edit
  • You will see an option- Display As, on your screen.
  • Enter Bad Debt or No Credit right after their name.
  • Finally,

Direct Method for the process

Create an noncollectable or bad debt expense account  before proceeding further: Generating an Item/Service named: Bad Debt or Uncontrollable Debt.

  • Go to the top of the screen and select the Gear Icon over there, and then go to Product and Services.
  • Go to the top right and choose
  • Go to the type of item and choose non-inventory or
  • Fill in the name there.
  • Go to the Income Account field, opt for Bad Debt or Uncontrollable Debt expense account.
  • Select

You should be able to write off the bad debt on your QuickBooks Desktop. If you cannot grasp any point from the ones given above, we recommend you to get in touch with the QuickBooks Technical Support Team. They are a third-party company which has a great help desk which comprises experienced QuickBooks Experts. You can give them a call at their toll-free helpline 📞 to get in touch with one of their QuickBooks Tech Experts. They serve QuickBooks clients from around the world and are available 24*7 on the line.

See Also Process to Pre-Fill Forms in QuickBooks

FAQ

  1. How can I add an expense account to monitor the bad debt in QuickBooks?

    💠 Locate Lists option
    💠 Choose Chart of Accounts
    💠 Hit on the Account option and then click on the New button
    💠 Choose Expense and then click on the Continue option
    💠 Write an Account Name
    💠 Hit on Save and Close option

  2. How can I verify the receivables in QuickBooks?

    💠 Locate Settings option
    💠 Hit on Chart of Accounts
    💠 Now discover the Action column appearing in the bad debts. Account
    💠 Choose Run Report

  3. How can I make a bad debt item in QuickBooks?

    💠 Go to the Setting icon.
    💠 Click Products and Services
    💠 Now choose New at the upper right corner of the screen.
    💠 Hit on the Non-inventory option
    💠 Enter the Name as Bad Debts in the field which says Name
    💠 Locate a drop-down named Income account and choose Bad debts.
    💠 Hit on Save & Close


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