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Community Contributor **

Bad Debts

I have followed instructions for recording  bad debts, however, the bad debts/credit memo's are showing up in under the income account and not under bad debt expense. When I run report from Chart of Accounts - Income Account, it shows the credit memo's as "Income" in the Account column. When I try to trace back to the error, I get back to the invoices the credit memo was applied to and notice that the product/items have "Income" as the Income account. However, when I change that to bad debt expense instead of Income, it still does not show up in the Bad Debt report. I'm out of ideas. Can anyone shed some light or suggest some other things I can check? 

3 Comments
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Moderator

Re: Bad Debts

Thank you for tracing the bad debt item, cornerstonemgmtg

 

It could be that when you change the account, the Also update this account in historical transactions box was not checked.


 

You can go back to the item information page then toggle the account.  Here's how: 

  1. On the Income account field, choose any income account. Then click Save and close
  2. Go back to the Bad debt information page then choose the correct expense account. 
  3. Add a check mark on the Also update this account in historical transactions box. 
  4. Click Save and close

Add a comment if you need anything else. 

Community Contributor **

Re: Bad Debts

Wow! That worked!!!! Thank you SO much!!! 

Established Community Backer ***

Re: Bad Debts

Remember, you want to see Both.

 

"I get back to the invoices the credit memo was applied to and notice that the product/items have "Income" as the Income account."

 

Yes, the Invoice is the Income.

And the Credit Memo shows for what you linked that Product/service. They Net to 0.

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