Writing Off Bad Customer Debt - Quickbooks Desktop

Writing Off Bad Customer Debt - Quickbooks Desktop

Sometimes it is necessary to "write off", or forgive a customer's open balance in Accounts Receivable. Follow these steps to clear your Accounts Receivable balance for any customer who will not pay and you decide to "forgive" the debt.

Setup
  1. Setup an Expense Account named "Bad Customer Debt", account number 698 (optional).
  2. Setup a Service Item named "Bad Debt", pointing to this expense account.
Writing Off Bad Debt
  1. Create a Credit Memo transaction (Customers Menu > Create Credit Memos/Refunds).
  2. Select today's date (Important! Do NOT date this transaction in the past!)
  3. Select the "Bad Debt" item.
  4. Enter the amount to write off.
  5. Click Save and Close.
  6. Select "Apply to Open Invoices".
  7. Follow the prompts to apply the credit to the invoices that you want to write off.

    • Related Articles

    • Writing Off Bad Customer Debt - Quickbooks Online

      Sometimes it is necessary to "write off", or forgive a customer's open balance in Accounts Receivable. Follow these steps to clear your Accounts Receivable balance for any customer who will not pay and you decide to "forgive" the debt. Setup Setup an ...

    • Customer Prepayments in QuickBooks

      Use this process to receive prepayments from customers for future delivery. Using this method will keep the prepayment from showing up as a credit in Accounts Receivable. Receive a prepayment using a Sales Receipt with Prepayment item (Prepayment ...

    • Using Credit Cards in QuickBooks

      Overview: Follow the instructions below to record credit card payment correctly in QuickBooks. Or contact us to sign up for an Intuit Merchant Services account that works seamlessly with QuickBooks. Click here for a video demonstration using ...

    • Are the Customer Deposits being used correctly?

      There are several ways of handling Customer Prepayments in QuickBooks. The default method of simply receiving payment against no invoice is problematic for several reasons. The main reason we do not recommend this is because it tends to clutter and ...

    • Was your company file setup by a QuickBooks professional?

      A well designed QuickBooks file can is essential for getting the most out of QuickBooks. All start-up companies should have their file developed by a QuickBooks professional. While QuickBooks offers lots of customization, there are a number of key ...