Learn how to write off bad debt in QuickBooks Online.
Bad debt means a customer owes you money but you can't collect it. They have a debt with you, but you know you aren't going to get paid. If your business uses accrual method accounting, you can sometimes write off bad debt as a deduction.
When invoices you send in QuickBooks become uncollectible, you need to record them as a bad debt and write them off. This ensures your accounts receivable and net income stay up-to-date.
Select the method that’s most appropriate for your company.
- Select + New.
- Under Customers, select Receive payment.
- From the Customer ▼ dropdown, select the appropriate customer.
- From the Outstanding Transactions section, select the invoice.
- From the Credits section, select the adjustment note.
- Select Save and Close.
The uncollectible receivable now appears on your Profit and Loss report under the Bad Debts expense account.
|Note: You can tell a bad-debt entity apart from your other customers by adding a note to their name:|