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Write off bad debt in QuickBooks Desktop

by Intuit Updated 2 months ago

Learn what to do if you can’t collect money from a customer and need to write it off as bad debt in QuickBooks Desktop.

When invoices you send in QuickBooks Desktop 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. If you’re using QuickBooks Online, here’s how to write off bad debt.

Tip: Stay on top of your customers' open balances with the Accounts Receivable Aging Detail report.

Step 1: Add an expense account to track the bad debt

  1. Go to the Lists menu and select Chart of Accounts.
  2. Select the Account menu and then New.
  3. Select Expense, then Continue.
  4. Enter an Account Name, for example, Bad Debt.
  5. Select Save and Close.

Step 2: Close out the unpaid invoices

  1. Go to the Customers menu and select Receive Payments.
  2. Enter the name of the customer in the Received from field.
  3. For Payment amount, enter $0.00.
  4. Select Discounts and credits.
  5. In the Amount of Discount field, enter the amount you'd like to write off.
  6. For Discount Account, select the account you added in step 1, and select Done.
  7. Select Save and Close.

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