The bad debt setup in QuickBooks account is important as it shows the amount that is not paid till now. This amount is that you didn’t receive it yet. This amount is created, when your customer did not pay you the amount that they owe from your organization in the form of an invoice.
By making this account, you can easily track it and ask the customer to pay it. It is done in the accounts receivable. Check the bad debts that it’s there or not.
Method to Write Off a Bad Debt in QuickBooks
First of all, locate for the customer having the outstanding invoice. Then create their account for the bad debt to keep them in your accounts and track them easily. Do the process mentioned below to do the setup:-
Total Time: 30 minutes
For Checking Bad Debt Customer
For this, check all the invoices which are in the bad debt Now click on the Report menu option Go to the Accounts Receivable Ageing Details report and open it The accounts that are shown as outstanding check them all Then create the account of Bad Debt for that customer from settings Go to the Chart of Accounts.
For Creating Bad Debt Account
Go to the Company Menu Then click on the Chart of Accounts Now, click the Account option and then in the New button to create new account In the account type, click on the Expense option then press the Continue button Enter the account number by selecting the number as the text field Select the field Account Name and then type the Bad Debt Then click on the OK button.
For Making a Record in Bad Debt
Firstly, open the QuickBooks Then select the Customer menu option Now click on the Receive Payments from further options After that, choose the bad debt customer from the list shown to you Now choose the corresponding line item for the bad debt Go to the option Discounts and Credits Click on the Amount of Discount field so that you can enter the total for bad debt Then click on Done option
In the end, click on the Save and Close button to finish it.
For Closing Bad Debt
In the QuickBooks, select the Customers menu option Select the option Receive payments Then in this, Choose the customer name correctly To remove bad debt, enter the amount as 00 Now choose the Discounts and Credit option Mention the write off amount Click on the account that is correct Then, click on the Save and Close button.
Also Read: How to Create, Schedule Automatic Invoices in QuickBooks
How to get in touch?
That is how to setup a bad debt account in QuickBooks and the other actions that can be done in the bad debt account.
You can easily get in touch with the team if you are facing any issues or have some queries. Connect with them by just dialing the toll-free QuickBooks customer support phone number . The members of the team are experienced and experts to handle all the situations easily. You get all the glitches resolved and get all the answers to your queries quickly. You can also reach them via live chat or send them an email at support@usingpos.com.
FAQs
When to Write-off Bad Debt
When you haven’t paid the debt in a significant amount of time, when your financial advisor tells you to, or when it can be proven that you don’t owe the money.
Write Off Bad Debt in QuickBooks Online
All you have to do is log into your QuickBooks Online account with the Dashboard. From there, go to “Write Off Bad Debt” and click the button. You will be able to select the vendor who’s bad debt you’re looking for assistance in removing from your record. The next screen allows you to choose how you want the bad debt written off–payment, partial payment, or outright delete it.
