bad debt write offs

Thanks for posting here in the Community, @SuzanneW.

Let me share some information about writing off bad debts.

When invoices become uncollectible, you'll need to record them as a bad debt and write them off. This ensures your accounts receivable and net income stay updated.

Since you're still seeing your bad debts in your cash basis Profit and Loss report even if it was already written off, let's go ahead and verify the account type. Let's make sure that it's categorized as Expense so it's being accounted for correctly.

Here's how:

1. Go to the Chart of Accounts.
2. Locate your Bad Debts account.
3. Under the Action column, click the dropdown, then Edit.
4. Make sure the Account Type is set to Expenses and the Detail Type is set to Bad Debts.
5. Click Save and Close.

Once you've verified that the account was set up correctly, run another P&L report. If you're still seeing the same problem, go to your Bad Debt item on the Products and Services page. Then, double-check you've chosen the Bad Debts account as the income account for the item.

For detailed steps on writing off bad debt, you can check out this article: Write off bad debt in QuickBooks Online.

You might also want to run a report to show particular data. Here's an article on cusotmizing your reports so they show specific information: Customize reports in QuickBooks Online.

Feel free to drop a comment on this post if you need any more information or have any questions about writing off bad debt in QuickBooks Online. I'm here to assist you, so don't hesitate to reach out. Stay safe!

@SuzanneW 

Ignore @AnneMariee 's response.  That only applies if you're on accrual basis.

The reason it's showing as income and an offsetting expense is because of the way you're entering it.  Forgive me if you know this already but cash basis accounting doesn't write off bad debt because there hasn't been any income recorded that needs to be offset.  Bad debt expense is only used if you're on accrual basis.  If you're on cash basis, you can either zero out the invoices or create credit memos that hit the same income accounts as the invoices you're trying to offset.  I like to make notes on the original amount due or save a copy of the original invoice in case the customer has questions or can pay later.  If there are inventory items on the invoices, you want to zero out the invoice because a credit memo will put them back into stock.