Follow the Steps to Write-off Bad Debt in Quickbooks

When you lend some money and you are unable to recover that money from the borrower then it becomes Bad debt amount. there can be various reasons behind why the borrower is not paying the debt. the borrower might have gone bankrupt or due to any other reason. hence the bad debt amount can affect the reports in Quickbooks when you try to reconcile the account. the non-collectible amount is also referred to as a bad debt amount which is needed to be write down to avoid any kind of discrepancies in your financial report. hence, it is mandatory to have a bad debt account in Quickbooks online. hence it is necessary for businesses that deals mostly in credits like finance business must have a separate bad debt accounts to write down all the bad debt amount in Quickbooks online. the bad debt amount will help you to generate the net profit of your business in the Quickbooks online. so if you are wondering about how you can write-off bad debt in Quickbooks then this blog will provide you the complete step-by-step process to write down bad-debt in Quickbooks. Write Off Bad Debts in QuickBooks

let us have a look at how we can write down the bad debt and report them. 

How you can write bad debt with Quickbooks online

here are the steps that you have to follow in order to write off bad debt in Quickbooks accounting software.

Check the Aging report(A/R Report)Quickbooks Error

  • Open the Quickbooks software and then click on the report option from the left pane.
  • Now click on the search bar and enter the Account aging report to locate it in the Quickbooks software.
  • After this, click on the Accounts receivable aging data report to get the Outstanding amount of your account. 

Create a new Account in Quickbooks for bad Debt

  • Go to the company section and then click on the gear icon.
  • open the charts of accounts option and then choose to create a new account. 
  • now click on the account type drop-down list and select the expense option from the list.
  • Now from the detail type drop-down list, select the amount of the bad debt and then name it as bad debt in the name field.
  • after this click on the save option to finish this process and then click on close.

Add A Bad Debt Item/Service In Quickbooks

  • Double-click on the quickbooks icon to open the quickbooks software.
  • now click on the gear icon and from the list click on product and service option.
  • Now go to add a new product and then from the list select the non-inventory option.
  • Now in the name field enter bad debt and then select the bad debt expenditure.
  • after this, you have to unmark the checkbox of “is taxable”.
  • Now click on the save and close option to save the changes and to end the process.

How To Create A Credit Memo In Bad Debt AccountHow to Write Off Bad Debt in QuickBooks

  • Open the quickbooks software and click on the “+” icon at the top of the quickbooks software.
  • Now under the customer section window click on the credit memo option.
  • Now select the customer whose credit memo you want to create from the drop-down list.
  • After this select the product created in the product/Service.
  • provide the bad debt or non-collectible amount in it.
  • open the memo text box and then enter the bad debt amount in it.
  • now complete this process by clicking on the save and close option.

Apply for credits with the Credit Memo of Deb Account in Quickbooks

  •  Go to the received payment from the customer option by clicking on this “+” icon at the top of the quickbooks software.
  • from the drop-down list select the customer and then select the invoice from the outstanding transactions.
  • Now select the credit memo you have created and verify that the amount in that section is $0.0 by running a check.
  • Go to the save and close option to end this process.

after creating a successful bad debt account in quickbooks, now you will be able to generate and run reports in quickbooks without any error. you can check your unpaid amounts and debts in this section. if you want to generate the report of bad debt account then click on the “+” icon and open the chart of the accounts option and then click on the bad debt account. now click on the run report option to generate the report. 

so you can follow this way to write-off bad debt amounts in quickbooks by creating a bad debt account. if you use the quickbooks payroll service and you want to add or edit quickbooks payroll service key then you will need to get the payroll service key. you can get the key from the quickbooks expert team. you need to simply contact them and provide the purchase proof of the payroll service.

while performing this operation if you have encountered any kind of error then you can contact the expert team at quickbooks. they will provide the best possible solution to resolve your issue.