Write
off bad debts in QuickBooks Online.
When
an invoice becomes uncollectible, you need to write it off. This ensures that the
receivable and net income of your accounts is up-to-date.
Step 1: It involves checking
your aging accounts receivable
Review
other invoices or receivables that should be considered as bad debt using the
Accounts Receivable Aging Detail report.
1.
Move
to the Reports menu.
2.
Secondly,
in the field of Find report by name, enter “Accounts Receivable Aging Detail.”
3.
Check
for the outstanding accounts receivable that can be written of
Step 2: Second step
involves creating a bad debts expense account
1.
Choose
the Settings ⚙ icon. Under Your
Company, choose Chart of Accounts.
2.
Then
in the upper right, select New.
3.
From
the drop-down of account type, choose Expenses.
4.
From
the ▼ drop-down of Detail Type, choose Bad debts.
5.
In
the Name field, enter “Bad debts.”
6.
Choose Save and Close.
Step 3: Creating a
bad debt item
1.
Choose the Settings ⚙ icon. Under Lists, Choose Products and Services.
2.
At
the upper right, choose New, and then Non-inventory.
3.
In
the field of Name,
enter “Bad debts.”
4.
From
the Income account ▼ drop-down, choose Bad debts.
5.
Choose Save and Close.
Step 4: Create a credit
memo for the bad debt
1.
Choose the Create icon ⨁.
2.
Under
Customers, choose Credit Memo.
3.
Under
the Customer ▼ drop-down, choose the appropriate customer.
4.
In
the section of Product/Service, choose Bad debts.
5.
In
the column of amount, the amount that you want to write off needs to be added.
6.
In
the Message
displayed on statement box,
enter “Bad Debt.”
7.
Choose Save and Close.
Step 5: Apply the
credit memo to the invoice
Note: You can set up QuickBooks to automatically
apply credit memos to your invoices. To do this:
1.
Choose the Settings ⚙ icon. Under Your Company, choose Account and Settings.
2.
Move to the Advanced tab.
3.
In the Automation section, choose the edit (pencil) ✎ icon.
4.
Choose the automatically apply credits checkbox.
5.
Choose Save, then Done.
|
1.
Choose the Create icon ⨁.
2.
Under
Customers, choose Receive Payment.
3.
From
the Customer ▼ drop-down, choose the appropriate customer.
4.
From
the Outstanding Transactions section, choose the invoice.
5.
From
the section of Credits, Choose the credit memo.
6.
Choose Save and Close.
The
receivables that are noncollectable now appear on your Profit and Loss report
under the Bad Debts expense account.
Step 6: Running a
report of bad debts
You
can run an Account QuickReport to check all the receivables you tagged as bad
debt. To do this:
1.
Choose the Settings ⚙ icon.
2.
Under
Your Company, Choose Chart of Accounts.
3.
In
the Action column of the bad debts account, Choose Run report.
Your books done right
- guaranteed.
Get
a QuickBooks-certified bookkeeper to categorize transactions and reconcile your
bank statements every month so your books are always 100% accurate.
If the above
solutions are not able to resolve your doubts and errors, you can certainly
reach out at QuickBooks helpline number,
which is 1-800-731-1629. Errors
related to Restoring a backup company file can be fixed within no time. For more
information visit @ www.qbooks247.com
No comments:
Post a Comment