Call @ 1-800-731-1629 Learn to Write off Bad Debt in QuickBooks Online

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.

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Call @ 1-800-731-1629 to Convert QuickBooks Desktop for Windows or Mac to QuickBooks Online with QuickBooks!

Below follows the few things that you should do after converting your QuickBooks Desktop file to QuickBooks Online to ensure a smooth conversion.

We recommend you maintaining your transactions on both sets of books until you confirm that QuickBooks Online is right for your business until then keep your data file in QuickBooks Desktop. Check The QuickBooks Guide to Converting QuickBooks Desktop to QuickBooks Online for additional information and insights about converting your data file

Verify and compare your financial reports in QuickBooks

To make sure data was transferred successfully, Comparing the Profit and Loss and Balance Sheet standard reports in QuickBooks Online and Desktop will help you to make sure if your data was transferred successfully.

Check the AR and Undeposited Funds account balances individually when comparing the reports. Learn what doesn’t come over from QuickBooks Desktop to Online.

When running your reports, make sure:

·         The date is set to "All Dates" in both products.

·         Your accounting method is set to accrual.

Expected report discrepancies:

·         Cash basis – The reports generated using this accounting method may not necessarily match. This is because QuickBooks Desktop and Online don't consider transactions as epaid the same way.

·         Inventory recalculation - Your reports may not match up if you imported your inventory information due to FIFO recalculations that may have taken place. There will be a task on your homepage that has a form which will need to be filed with the IRS stating the Inventory Accounting changes that took place.

·         Multi-currency - Transactions with 3 different types of currencies involved do not convert to QuickBooks Online at this time.

Review your accounts' detail types

Is account detail type the same as sub-accounts?

After conversion, QuickBooks Online keeps your sub-account hierarchy. However, there is an additional level of account typing used by QuickBooks online called "Detail Type." Detail types allow you to be more specific with your account organization. For example, expense accounts can have a number of detail types, such as Advertising, Supplies and Materials, Legal Fees, and so on.

The conversion process assigns detail types to accounts where the detail is obvious (e.g. Undeposited Funds). A generic detail type, such as Other Miscellaneous Income is assigned by the conversion process, For accounts where it isn’t clear what the detail type should be (a majority of accounts are like this) . You can correct this later.

Run the Account Listing Report to review and edit your accounts’ detail types.

1.      Select Reports from the left menu.

2.      Search for and open the "Account List" report.

3.      Review your accounts.

4.      To edit an account's detail type, select the account name.

5.      From the Detail Type drop-down, choose the correct detail type.

6.      Select Save and Close.

Complete your Payroll setup

If you imported Payroll data from QuickBooks Desktop for Windows

Transactions and payroll accounts are converted to balance your books, but details behind the transactions (like payroll item breakdowns and employee year-to-date numbers) don't convert.

Liability refunds, opening balance transactions, adjustment transactions and that affect accounts convert to journal entries.

To complete your payroll setup:

1.      Select Workers from the left menu.

2.      In the "Paid in [Year]" column, be sure each employee who received a pay check this year is switched to Yes. Note: Employees who haven't been paid in the current year will automatically be listed as No.

3.      To enter and/or verify your year-to-date payroll totals and employee info, select complete payroll setup.

4.      To complete the setup, follow the onscreen instructions.

5.      Use "Run Payroll" once you're ready to pay your employees.

Additional steps

·         In case E-services to pay/file your taxes electronically were earlier used by you, you'll need to re-enrol for this service in QuickBooks Online. Just log in, then, go to Gear icon and select Payroll Settings.

·         If you were using or want to use Direct Deposit for your employees, you'll need to add your employer and employee's individual bank account info. This can be done from the "Payroll Settings" page, or from the "Employee Setup" screen.

·         Finally, you'll need to enter/reconcile any historical tax payments you made so far this year. Select Employees from the left menu, then Payroll Tax. From here, select Enter prior tax history and begin to add all of the past tax payments that you made for various agencies so far this year. They should balance out against your liabilities (excluding any current unpaid tax liabilities) so far this year.

Regarding pay history and certain pay types: ·         When supported, your payroll history (the setup screen) will come over. You'll only need to verify the totals. If your payroll history does not convert, we'll guide you on how to enter these year-to-date totals to get going again. ·         If you reported "Group Term Life Insurance" or "S-Corp Owners Health Insurance", our system will recalculate net pay per the calculations for QuickBooks Online Payroll. Keep this in mind when comparing your QuickBooks Online Payroll Summary reports to your QuickBooks Desktop Summary reports.

If you were using Intuit Online Payroll with QuickBooks Desktop for Mac

If you want to start using QuickBooks Online Payroll, set it up in your company file:

1.      Select Workers from the left menu.

2.      In the "Paid in [Year]" column, be sure each employee who received a pay check this year is switched to Yes. Note: Employees who have not been paid in the current year will automatically be listed as No.

3.      To enter and/or verify your year-to-date payroll totals and employee info, select complete payroll setup.

4.      Follow the onscreen instructions to complete your setup.

5.      Use "Run Payroll" when you're ready to pay your employees.

If you want to continue using your standalone Payroll, cancel your QuickBooks Online Payroll first.

1.      Log in to qbo.intuit.com.

2.      Select the Gear icon at the top, and then choose Account and Settings (or Company Settings).

3.      Select Billing and Subscription.

4.      In the "Payroll" section, select Cancel. Important: You will require contacting us, if you have the option to cancel QuickBooks Online but not payroll. The update might need to be done on our end to make sure your existing discounts won't be affected.

5.      To begin syncing transactions with QuickBooks Online, change your export preferences in Intuit Online Payroll.  Map your custom pay types

If your pay types from QuickBooks Desktop were not mapped with a standard QuickBooks Online pay type, then you may be asked to match your payroll items.

To map your QuickBooks Desktop pay types with that of QuickBooks Online:

1.      Select the (choose one) drop-down in the "QuickBooks Online" column.

2.      Choose the pay type that closely matches how the item was set up in your Desktop file.

o    To make sure the pay types match, it's a good practice to check your QuickBooks Desktop file and see how your items are set up. Example: Match 'S Corp' to 'S Corp Insurance' pay type.

3.      After completing the mapping, select Save and close.

4.      Perform the same process for each item that needs to be mapped, and then select Continue.

Important:  If you have selected Skip for Now, You won’t be allowed to go back and map your pay types.

Don’t see options to choose from? Some pay types imported are not supported in QuickBooks Online Payroll. If this is the case, select Skip for now in the bottom right of the screen.

Note: After selecting "Skip for now," you'll have to manually create pay types for your employees to complete the payroll setup.

Link your existing Payments account

If you have an existing active Payments account, you will not be required to sign up for a new one for QuickBooks Online. You can unlink your existing account from your Desktop Company, and then link it to QuickBooks Online Company.

Get to know FIFO (if you imported inventory)

Once imported to QuickBooks Online, the calculation method for your inventory will be FIFO (first-in-first-out), using the "as of" date that you chose during import.

What does this mean for my business? A file form 3115 with the IRS will need to be filed by you to notify them that you made this change in accounting, using the "as of/effective" date that you chose while importing. Learn about this form and inventory in QuickBooks.

However, in case of any query or concern related to QuickBooks integration with other software, feel free to reach us by dialing QuickBooks Help Number USA (1-800-731-1629). Our accounting experts are made available globally for 24/7 to confer instant assistance.