How do I write off unpaid invoices?
If you use accounting software like Quickbooks, then there is a specific category within the application that can track all unpaid transactions. First, ensure you have documentation of all attempts to obtain the client’s overdue accounts. If you do not already have a Bad Debt expense account in your chart of accounts, now is the time to make one.
Next, in the Products and Services list, create a non-inventory item called Bad Debt and select the bad debt expense account on the screen. Alongside the bad debt item, create a credit memo for the customer, which states the amount owed, then save. Open your receive payments and apply the memo to the invoice.
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