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Level 1

Is anyone here a cash basis service company?

I don't agree with the advice I'm getting about writing off uncollectible invoices here. If I have not recorded the income, I cannot record the bad debt expense. Does anyone have experience with this? How do you get the invoices out of your system without booking a bad debt expense?
2 Comments
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QuickBooks Team

Is anyone here a cash basis service company?

Hi @mindy14,

 

I'll take care of this query for you.

 

Short of deleting the invoices (which isn't advisable), there isn't another option to close these uncollectible invoices other than recording a bad debt. This ensures that your account receivables and net income remain updated and accurate. 

 

You can also consult your bookkeeper or accountant on how it would be best to proceed with recording these transactions.

 

If you have an accountant user in the company, you have them follow the steps listed in this article: Use write off invoices. This is an exclusive feature for accountants with a QuickBooks Online Accountant account. 

 

Feel free to come back and place a post here in the Community, if you have other questions. I'll get back to you as soon as I can. 

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Level 15

Is anyone here a cash basis service company?

@mindy14 

 

To start with if you were a cash based business, you would not have invoices that are waiting to be paid.

 

QB is accrual accounting, it only reports on cash basis if you require it to.

 

The procedure, or at least the concept to write off an invoice with a credit memo posting to bad debt expense is the correct one.

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