Finishing off a certain task can be hard in this case writing off bad debt can be a hard task in QuickBooks desktop too. However, this article is here for your support to help in the write off bad debt in Quickbooks. The following article will elaborate upon what does writing off bad debt in QuickBooks desktop mean and how to do it.
Albeit you have the freedom to contact the QuickBooks Desktop help desk number 1-888-905-3553 anytime you need to.
What is Write Off Bad Debt in QuickBooks Desktop?
When you are running a business venture you ought to come across such pesky customers who refuse to pay the debts or you are unable to contact them, then, in that case, the debt that was taken by them becomes a bad debt and you need to dispose it off to create new space and to sort out accrual data (as it displays the payment that has to be received combined with payment received in net amount).
How to Write off Bad Debt in QuickBooks Desktop?
You need to follow the below mention two-step solution to write off bad debt in QuickBooks desktop:
Step 1: Go to the reports tab Reports > customers and receivables > Open Invoices report.
- This window will give you the information about the customers of the particular group who are yet to pay the debts or resolve the debts.
- Search or find the customer details/name whose data you want to write off or dispose of.
- Note down the customer’s invoice number and amount to be cleared.
Step 2: go to the customer center on your home screen > credit memos and refunds.
- In the credit memos and refund popup, enter the customer’s name and choose the date you want to dump the invoice or in other words write off the debt and do not enter anything memo number as it is an automatic process, done by QuickBooks.
- If you already have an item made specifically made and named bad debt then choose bad debt in the item.
- If not then create a new item by selecting the option to add new > other charges > name it as ‘bad debt’> account – select bad debt general ledger > Ok to save changes.
- In the description, you may write the company’s name of the bad debt customer or invoice number for easy sorting.
- In the amount, section writes the due amount or amount mentioned on the invoice as the uncleared amount.
- Select the preferred class if you are using QuickBooks class tracker feature Adjust the sales tax payable if your company takes an account of the sales tax payable and this method that is credit memos and refund is the only way of altering the sales tax payable.
- Select save and close the credit memos and refund window.
You May Also Read: How to Pay Bills in QuickBooks Online?
A QuickBooks popup notifying you about the remaining amount you need to receive from the customer and present you with the following options:
- QuickBooks will offer help regarding applying the debts somewhere else.
- Offer a refund or help you in writing check.
- Apply to invoice.
Select the third option > select the invoice number of the customer > check it > select done.
You will be further prompted that the selected invoice has been written off. Which simply means it will not appear anywhere in your balance sheet or accrual and will appear on your income sheet as a bad expense.
This will result in a reduction of your income as the amount was not received or you failed to receive the amount.
Conclusion:
Although it is easy to follow the article to write off bad debt in QuickBooks, there is a possibility that you might get stuck while following the mentioned methodologies, if that is the case do not hesitate and reach out the QuickBooks Desktop Support Number +1-888-905-3553.