Its not easy to understand QuickBooks and we totally understand that. This is why we have come out with the question how to write off bad debt in QuickBooks.
It’s an unfortunate part of running a business but every so often you get those stinky customers that decide that they’re not going to pay for your services. So after you have kind of exhausted all of your possibilities of trying to collect and get your money back using ways:
- You’ve called them you’ve emailed them,
- You’ve tried to work out payment plans etc
And after you know a couple months or a year you kind of realize they’re not going to pay you’re not going to be able to collect this you can write these off. This can be easily done by getting them off your books of accounts.
How to Write off Bad Debt in QuickBooks?
So let’s see how to write off bad debt in QuickBooks. Follow these simple steps and you will be able to that with ease.
Please make sure that the steps provided below involves a bit of a technicality, thus if you are not able to get yourself through then reach out for technical help.
- Head over to the reports section.
- Click on the customers and receivables tab.
- Open the invoices tab and you will now see all the open invoices within your business. These are all the customers that currently owe you money.
We’re going to look for the one that we want to write off. Now that you have figured out that you are not going to be able to collect on this invoice, for e.g. its invoice number 148 from ABC Corp and the amount is $1465 so what we’re going to do is write him off.
- We’re going to come up to customers tab.
- Now create credit memos and refunds and we’re going to enter in the company’s name ABC Corp.
- Put the date when you want to write off the bad debts.
- Provide the credit number.
- Now choose the item that is setup for bad debt.
- Enter the details and provide the description which has caused bad debt.
- Put in the amount that has remained noncollectable. Enter the amount in the bad debt account.
- Click OK.
- Since the item that you sold, the amount of which is now not recovered, thus you will have to change the item from taxable to non taxable. And this way you won’t have sales tax liability on you.
- Hit save and close to update the transaction. The moment you will do that, you will encounter a pop-up that says “you’ve got a remaining balance on this credit”. What you want to do with that.
- Since we are writing off Bad Debts, thus you would need to attach the amount to an invoice and click Ok.
Congratulations, you have successfully written bad debts. If you followed the steps as it is then you may now know how to write off bad debt in QuickBooks.
But if you have faced any problem while going through the process above then it’s time that you should connect with QuickBooks Support at their toll-free number.