Writing Off Bad Customer Debt - Quickbooks Online

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
  1. Setup an Expense Account named "Bad Customer Debt", account number 698 (optional).
  2. Setup a new Products and Services named "Bad Debt", pointing to this expense account.
 Create a credit memo for the bad debt
  1. Select + New.
  2. Select Credit memo.
  3. Select the customer from the Customer ▼ dropdown.
  4. In the Product/Service section, select Bad debts.
  5. In the Amount column, enter the amount you want to write off.
  6. In the Message displayed on statement box, enter “Bad Debt.”
  7. Select Save and Close.
Apply the credit memo to the invoice
  1. Select + New.
  2. Under Customers, select Receive payment.
  3. From the Customer ▼ dropdown, select the appropriate customer.
  4. From the Outstanding Transactions section, select the invoice.
  5. From the Credits section, select the credit memo.
  6. Select Save and Close.

    The uncollectible receivable now appears on your Profit and Loss report under the Bad Debts expense account,


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