Write off bad debts in QuickBooks desktop and online

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Write off Bad Debts in QuickBooks Desktop and
Online
Write off bad debts is a common thing in
accounting and bookkeeping. The same task is
carried out in QuickBooks accounting software as
well. To write off bad debt on QuickBooks
desktop or online, certain steps can be followed.
Writing off bad debts is a must, as the user
might face issues during the bank reconciliation
and it will also assist in avoiding
discrepancies and profit/loss statements. By
writing off bad debts in QuickBooks, one can
clear the invoices from the account receivables
that assist in getting the appropriate profit
amount. Considering the importance of writing
off bad debts in QuickBooks, we have come up with
this piece of information. Thus, keep reading
further to elevate your understanding of writing
off bad debts in QuickBooks.
What is meant by Bad debts? Bad debts mean an
amount that is unable to recover from the debtor.
The debtor is the one who owes you some amount
of money i.e. the borrower. When the debtor is
unable to pay the amount, it is termed as bad
debt. Debt issues can affect the profit and loss
reports while reconciling the accounts in
QuickBooks. Bad debts relate to the account
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• receivables and are referred to as
  non-collectible accounts. In case the business
  uses the accrual method of accounting, bad debts
  can be written off as a deduction. Writing off
  bad debts assures the accounts receivable and net
  revenue stay updated.
• All-in-all bad debt is a terminology that is used
  when the user sells goods on credit, and the
  customer didnt pay. The entire process to write
  off bad debts in QuickBooks is discussed later
  in this article.
• Steps to write off bad debt in QuickBooks desktop
• If you are a QuickBooks desktop user, then the
  steps listed below would surely help you in
  writing off bad debts in QuickBooks Desktop. Let
  us explore the steps carefully
• Step 1 Creating an expense account named bad
  debt
• In this step, the user is required to move to the
  lists in the top navigation bar and then choose
  the company option
• After that, the user is required to navigate to
  the chart of accounts
• The next move is to build a new expense account
  by Selecting on the Account tab and then click
  new
• The user is then required to select expenses
• Once done with that, type in bad debt in the
  account name field and also choose the save and
  close tab.
• Step 2 Recording and Closing the bad debt
• After obeying the above move, the user is
  required to pick the receive payments tab in the
  customer-list
• Followed by entering the customers name in the
  received form and 0.00 in the payment amount.
• Important point In the description, the user can
  write the invoice number of the bad debt for
  tracking.
• The next move is to tick on the discount
  credits tab

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1. Also, write the volume of bad debt the user wants
   to write off in the amount of discount section.
2. Now, in the discount account, the user is
   reckoned to collect the bad debt account that
   was produced in the above move
3. The last step here is to click on the save and
   close tabs.

• Steps to write off bad debt in QuickBooks Online
• The above steps were only for QB desktop users.
  Though, if you are QuickBooks online user, then
  the actions posted below would be suitable for
  you if you need to write off bad debts in
  QuickBooks online.
• Step 1 Review the old report for Accounts
  receivable
• The very first thing that one needs to do before
  writing off the bad debts in QuickBooks online
  is to review the aging report for accounts
  receivable. This can be done as follows
• The user is recommended to use the left side menu
  for opening the reports section
• Once done with that, the user is supposed to open
  the search bar

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• View for the account receivable aging record from
  the search bar
• And then, check the outstanding receivable
  account.
• The user should also tick on the accounts
  receivable aging expansion report.
• Step 2 Making of bad debt account in QuickBooks
• In this move, tap on the setting icon from the
  company section.
• Followed by selecting the chart of accounts tab
• The next action is to select the option to
  generate a new account
• And also, tick on the expenses option from the
  account font drop-down list
• Once finished with that, the user needs to select
  all the bad debts from the expansion type
  drop-down list and also write in bad debt in the
  name field
• The final action is to hit on save and close to
  finish this process.
• Step 3 Installation up a service/ product bad
  debt item
• For this, the user is required to click on the
  gear icon and also choose the product and
  services tab from the lists section
• Now, tick on the new product, and later from the
  product/service data section, tick on the
  non-inventory tab
• The next action is to write bad debt in the name
  text box
• Followed by selecting bad debt expenditure
  created in the income account section
• Once done with that, the user is supposed to
  unmark the Is Taxable check-box

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• The next action is to choose the item that has
  been built for the bad debt in the
  product/service area
• Once done with that type in the amount of the bad
  debt/unpaid invoices with positive values
• Move ahead to the memo text box and also type in
  the bad debt amount
• The last step here is to click on the save and
  close tabs.
• Step 5 Executing the credit memo to enforce
  credits
• The user needs to start the process off by
  clicking the plus tab on top of the screen and
  then move to the received payment from the
  customers section.
• Later that, Select the client from the drop-down
  menu
• And also select the invoice to be written off
  from the Arrear transactions list
• Now, choose the credit memo that was created from
  under the credits section
• The next step is to run a check and affirm that
  the amount reflecting in that section is 0.00
• Towards the end, the user needs to click on the
  save and close the tab and you are good to go.
• To wrap it up!
• This was a prolonged discussion about the process
  to write off bad debt in QuickBooks. After
  scrutinizing this article, we assume that you
  might be able to write off bad debts in
  QuickBooks successfully.
• Despite that if you are confused regarding
  writing off bad debts or if you are stuck at any
  stage, then have a one-on-one conversation with
  the QuickBooks pro support team and certified
  accounting professionals.