How to Write Off Bad Debt in QuickBooks Desktop or Online?

by Devin Smith Technical Support Expert

Debt that cannot be recovered or collected from the debtor is a bad debt. Under the process of supplying some amount for use. The “accounts receivable” category on the balance sheet by the amount of the uncollected debt.

A debit entry for the same amount is entered into the “Allowance for Doubtful Accounts” columns to balance the balance sheet. This process is called write off bad debt. In this post we have discussed about the complete process to write off bad debt in QuickBooks desktop or online.

Write off bad debt in QuickBooks desktop

Bad debt means that you have given some amount of money to your customer, but you can’t collect it now. The amount already debt from your side, but know you aren’t going to get paid for the amount. If your business uses accrual method of accounting, then you can mention write off bad debt In QuickBooks as a deduction. You need to record them as a bed debt and write them off. This ensures your accounts receivable, so that the net income get update with the bad debt.

Method 1: To check accounts receivable

You can use the Accounts Receivable Ageing Details report for the bad debt in your business.

1. Select the Reports menu

2. Check out for the Accounts Receivable Ageing Detail report

3. Select which outstanding accounts receivable should be written off

Method 2: Create a bad debts expense account

You can create a “bad debts” expense account by following the given steps below. If you have it, you can leave the step.

1. Go to Settings option and select Chart of Accounts

2. On the upper right, select New to create a new account

3. Select the Account Type dropdown, choose Expenses option

4. Select the Detail Type dropdown, choose Bad debts option

5. Select Save and Close

Method 3: Create a bad debt item

Create a non-inventory item as a file for the bad debt. This isn’t a real item, it’s just to balance the accounting.

1. Go to settings option and select Products and Services

2. On the upper right, select New, and then Non-inventory

3. Enter “bad debts” in the Name field

4. Select the Income account dropdown, choose Bad debts

5. Select Save and Close

Method 4: Create a credit note for the bad debt

1. Select + New

2. Select Credit note

3. Select the customer from the Customer dropdown

4. Product/Service section, select Bad debts

5. Go to Amount column, enter the amount you want to write off

6. In Message displayed on statement box, enter “Bad Debt”

7. And the last Save and Close

Method 5: Create the note of credit to the invoice

1. Select + New

2. Under Customers, select Receive payment

3. Select the Customer dropdown, and then select appropriate customer

4. From the Outstanding Transactions section, select the invoice

5. From the Credits section, select the credit note

6. At the end, Save and Close

Now, the uncollectible receivable now appears on your Profit and Loss report under the Bad Debt expense account.

Method 6: Run a bad debt report

You can check the Report that all the receivables you tagged are running properly or not.

1. Go to Settings

2. Select Chart of Accounts

3. Select the Run report, in the action column of the bad debts

NOTE: You can tell a bad-debt entity apart from your other customers by adding a note to their name.

1. Go to the Sales menu, select the Customers option and then select the customer’s name

2. On the upper right, select Edit

3. In the Display Name as field, enter “Bad Debt” and then Save the data

Conclusion:

We have a team of certified experts that can help you in write off bad debts in QuickBooks desktop or online within a few minutes.

In fact, our QuickBooks premier support team is highly knowledgeable and avails for 24*7*365 assistance over a chat, email support or by a phone call at 1-844-405-0906.

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