What is a Bad Debt Expense?

A bad debt expense is recorded when a consumer is unable to pay an outstanding debt due to bankruptcy or other financial difficulties. It is particularly common for businesses that operate based on credit. For example, if they offer payment terms of 15 days and they have a customer who is unable, or unwilling, to pay you back. Bad debt expense can be calculated using the direct write-off technique, which means the invoice amount is charged directly to bad debt expenditure and deducted from accounts receivable. Or, with the allowance method, where bad debts are anticipated even before they occur, and an allowance is established. You must record the expense in your company's accounting records to deduct the debt from your company's accounts after it has been collected.

For Business

Accountants

Pricing Pricing

Learn & Support

QuickBooks Online QuickBooks Online Accountant

For Business

Plans & PricingFind which plan best suits your business.

NEW QuickBooks Online AdvancedFor larger businesses with complex needs.

Helpful ResourcesResources for small business owners

Find an AdvisorFind a QuickBooks Certified bookkeeper or accountant near you

Features

Bank Feeds

Cloud Accounting

Invoicing

Project Profitability

Accounting Reports

Inventory Management

Data Migration

GST & VAT Tracking

Expense Tracker

Mobile Accounting App

Connect Your Apps

See all features

SearchIndustry picker

Our free online invoice generator makes business invoicing a breeze

Talk to Sales: +852 2571 9557 (Toll Free) Monday - Friday 6am - 8pm (SGT)

Talk to Sales: +353 1 575 9733 (Toll Free) Monday - Friday 6am - 8pm (GMT+1)

Talk to Sales: +60 15 4600 0666 (Toll Free) Monday - Friday 6am - 8pm

Talk to Sales: +63 282313135 (Toll Free) Monday - Friday 6am - 8pm

Talk to Sales: +65 3105 8428 (Toll Free) Monday - Friday 6am - 8pm (SGT)

Talk to Sales: +27 101 003076 (Toll Free)

Talk to Sales: +971 60 052 1704 (Toll Free) Monday - Friday 6am-8pm (Dubai Time)

Talk to Sales: +254 207 609 420 (Toll Free) Monday - Friday 6am-8pm

Talk to Sales: +622 150967613 (Toll Free) Monday - Friday 6am-8pm

Talk to Sales: +97 233035906 (Toll Free) Monday - Friday 6am-8pm

Talk to Sales: +66 24606633 (Toll Free) Monday - Friday 6am-8pm

Talk to Sales: +256 323 510245 (Toll Free) Monday - Friday 6am-8pm

Talk to Sales: +966 125 122 822 (Toll Free) Monday - Friday 6am-8pm

Talk to Sales: +65 31633422 (Toll Free)

Talk to Sales: +1 800 509 6770 (Toll Free)

QuickBooks For AccountantsPowerful accounting software for your small business clients

NEWQuickBooks LedgerFor low transacting or non-trading clients

NEW QuickBooks Online AdvancedDesigned for growing, thriving businesses.

QuickBooks FeaturesFeatures and functionality included in QuickBooks Online

Accountant PricingPlans & pricing of QuickBooks Online for accountants

Helpful ResourcesResources for accountants and bookkeepers

Events

Certification

Getting started

Customers & Income

Expenses & Suppliers

Events & Webinars

View all Help/Search

Business Advice

Chat Support

Contact support

Students are eligible for a free QuickBooks Online account for 12 months

This offer isn't available for your region.

Please update your region or go to the site.

Change region

Switch to

Your region is set to and your language is . Edit preferences

Choose your... Country Language

Looking for our site?

We have more specific product offerings on our site.

Stay on

Switch to

Your region is set to and your language is . Edit preferences

SALE

Buy now and
save up to 50% off today

SALE

See plans + pricing

What is an XLS/XLSX file?

XLS/XLSX File (definition)

An XLS file is the format of Microsoft Excel 1997-2003. Microsoft Excel 2007 and newer use the XLSX file format.

Go Back to Glossary

Ready to run your business better with QuickBooks Online?

For Businesses

Small Business Accounting Software

Features & Benefits

Spreadsheets Alternative

Accountants & Bookkeepers

Grow Your Practice Online

QuickBooks Online Accountant Features

Upcoming Events

Helpful Resources

Learn & Support

QuickBooks Online Support

Contact QuickBooks Online Support

QuickBooks Online FAQ

QuickBooks Accounting Glossary

QuickBooks Resources

Accounting and Business Tools and Templates

Make a Complaint

Tools and Templates

Free accounting tools and templates to help speed up and simplify workflows.

Business Budget

Markup Calculator

Raw Materials Calculator

Income Tax Calculator

Free Invoice Generator

Balance Sheet Template

Cash Flow Statements

Free Invoice Templates

Sitemap

Intuit, QuickBooks, QB, TurboTax, ProConnect, and Mint are registered trademarks of Intuit Inc. Terms and conditions, features, support, pricing, and service options subject to change without notice.

By accessing and using this page you agree to the Terms and Conditions.

Legal Privacy Security Compliance