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Level 1

Is there an easy way to clear overdue invoices to a zero balance?

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QuickBooks Team

Is there an easy way to clear overdue invoices to a zero balance?

Ask and you shall receive, @diane-hickman.


In QuickBooks Online (QBO), clearing overdue invoices to a zero balance is known as Writing Off Bad Debt. Doing this requires some setup, so I'll be happy guide you through the entire process below. Each step includes a link to a guide or image that will help to ensure your success.


Writing Off Bad Debt in QBO

  1. Review the Accounts Receivable Aging Report. This statement helps you determine which invoices are outstanding and by how long. Just navigate to the Reports tab and search for Aging, then select it from the pane that appears below.

  2. Create an Account for Bad Debt. This is where you'll record the expense incurred by writing off the outstanding invoices.
  3. Make a Product/Service item for Bad Debt. The item will be used on the Credit Memo to properly clear them to a zero balance.
  4. Create a Credit Memo for the Debt. The memo will be applied to the actual invoice to clear it.
  5. Apply the Credit Memo. These instructions are available from the guide in the previous step or from the video tutorial below:


All of this information can also be found from our thorough guide on writing off bad debt here. I also recommend checking out this awesome blog post on bad debt to learn more.


Using these resources, you'll have those invoices cleared to a zero balance in no time. Please know you can always find me here for all of your QuickBooks needs, I want to make sure you're taken care of. Thanks for bringing us your question, wishing you and your business great success in all future endeavors.

Level 1

Is there an easy way to clear overdue invoices to a zero balance?

Thanks for this article. Just to clarify, I know I cannot write the unpaid invoices off on my taxes, I just want to zero out my books because I know the customers will not pay (these are years old). Is this the appropriate method (that you shared above?) 


Is there an easy way to clear overdue invoices to a zero balance?

Hello there, alissablackmanmft.


Yes, the steps shared by my colleague, MichaelDL, help zero out your books.


Whenever you have uncollectible invoices, you'll need to record bad debts and write them off. If your business uses accrual method accounting, you can sometimes write off bad debt as a deduction. Learn more about bad debt from the IRS.


Afterward, you can run a bad debts report to check all the receivables you tagged as bad debt. Here's how:


  1. From the Accounting tab, select Chart of accounts.
  2. Locate the bad debts account.
  3. In the ACTION column, select Run report.


Don't hesitate to get back to this thread. I'm always around to help whenever you need one.

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