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Best Tutorial for Writing Off Bad Debt In QuickBooks

by John Kartan Accounting And Bookkeeping

A bad debt, also known as a non-collectible amount, is basically an amount of money that you can’t recover from the debtor due to some reasons. To avoid discrepancies in the income statement and profit & loss reports, writing off bad debts is necessary for businesses. By writing off bad debt in QuickBooks, you can remove the unpaid invoices from the account receivables that helps in calculating the actual net profit amount. In this post, we will explain the complete procedure on writing off bad debt in QuickBooks Desktop in layman’s language and a step-wise manner.

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Quick Steps to Write off Bad Debts in QuickBooks

Below we’ve mentioned the steps that you need to follow to write off bad debt in QuickBooks:

Step 1: Create a Bad Debt Expense Account

  1. At first, you need to click on the Lists menu and select the Chart of Accounts option.
  2. Then, go to the Account menu and click New.
  3. Now, choose Expense as the account type and then click Continue.
  4. In the Account Name bar, type a name that you want to give to your account. For example - Bad Debt.
  5. After following the steps mentioned above, click the Save and Close button to finish the creation process of your bad debt expense account.

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Step 2: Write off uncollectible invoices in your QuickBooks Desktop

  1. You need to open the Customers menu and choose the Receive Payments option from the drop-down list.
  2. In the Received from column, type the debtor’s name.
  3. Now, Enter $0.00 in the Payment amount column.
  4. Go to Discount and Credits and fill the amount of money you want to write off in the Amount of Discount column.
  5. For Discount Account, choose the bad debt expense account you have created in step 1 and click Done.
  6. At last, click the Save and Close button to finish writing off bad debt and close the transaction window.

Conclusion:

The reason why writing off bad debts in QuickBooks is so important is that it helps in removing  fiscal discrepancies. We hope that after following the aforementioned steps in the post, you’ll be able to write off bad debts in your QuickBooks. However, if you are still facing any issue while writing off bad debt in your QuickBooks Desktop, you can seek the help of certified QuickBooks experts by calling on our customer support number (844-888-4666).

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About John Kartan Advanced   Accounting And Bookkeeping

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Joined APSense since, January 28th, 2021, From Terrell, United States.

Created on Mar 17th 2021 11:55. Viewed 146 times.

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