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Customer return for parts out of spec

Hi all! 

 

We recently sold  items to a customer. Invoiced as normal. the parts are out of spec and will be tossed. We are going to be issuing a credit for the parts, but don't want to return parts to inventory. What is the best way to do this? 

1 Comment
QuickBooks Team

Re: Customer return for parts out of spec

Hello there, @joneill1186,

 

The invoice now become non-collectible since you don't want to return the parts to your inventory.

 

You can write off the invoice and declare it as a bad debt to clear out your accounts receivable.

 

Make sure to review your Accounts Receivable Aging Detail report before addressing a non-collectible debt. This is to ensure your report is correct.

 

Here's how to pull up the report:

  1. Go to your Reports menu.
  2. Select Customers & Receivables, then A/R Aging Detail.

Once done, please follow the steps on how to write off bad debt:

 

Step 1: Create a bad debt account.

  1. From your Lists menu, select Chart of Accounts.
  2. Right-click anywhere, then select New.
  3. Select Expense, then Continue.
    baddebtexpenseaccount.PNG
  4. Enter the Account name, then click Save & Close.
    baddebtexpenseaccount1.PNG

Step 2: Record the bad debt.

  1. Go to your Customers menu.
  2. Select Receive Payments.
  3. Select the name of the customer.
  4. Leave the amount field at 0.00
  5. Choose the line item that will not be paid.
  6. Click Discounts & Credits.
    receivepayment.PNG
  7. Enter the amount in the Amount of Discount field.
  8. From the Discount Account section, select the Bad debt expense account, then click Done.
    receivepayment1.PNG
  9. Click Save & Close.

The uncollectible receivable now appears on your Profit and Loss report under the Bad debt Expense account.

 

For your guidance with the solution above, please check this out: Write off bad debt.

 

That helps your concern for today. Please let me know if there's anything else you need and I'd be glad to help.