• Create BookmarkCreate Bookmark
  • Create Note or TagCreate Note or Tag
  • PrintPrint

Recording Bad Debts

If your company keeps records on an accrual basis, you've already recorded income when a job is completed and invoice, even though you haven't yet received the payment from your customer. So when you discover that the customer isn't going to pay, you need to offset the income you recorded with a bad debt expense.

Record Bad Debts

Select Receive Payments from the Customers menu.

Enter the name of the customer and job, if applicable, for whom you will record a bad debt.

Leave the amount set to zero.

Click to place a checkmark to the left of an uncollectible invoice.

Did You Know?

You might receive a warning about automatically calculating payments. Depending on the preferences you set for your company, you might receive a warning telling you that QuickBooks will automatically enter a payment in the amount of the invoice you checked. To override this calculation, click No when this warning appears. Note that clicking No turns off the company preference for automatically applying payments. To reset this preference, select Edit Preferences and click the Sales & Customers icon and the Company Preferences tab. Check the box to automatically apply payments.

Click OK in the warning box.

Click the Discounts & Credits button.

Enter as a discount the amount of the uncollectible debt.

Did You Know?

You enter bad debts as positive numbers. Even though you are reducing the amount owed by the customer, enter the amount as a positive number. QuickBooks will reduce the amount due by the number you enter.

Change the discount account to the account where you record bad debt expenses.

Click the Done button.

Save the Receive Payments window.



Not a subscriber?

Start A Free Trial

  • Creative Edge
  • Create BookmarkCreate Bookmark
  • Create Note or TagCreate Note or Tag
  • PrintPrint