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Teresa Guardian
Level 2

create write off item

When I write off small amount of customer invoice, do I need to choose discount/credit or I need to choose Minor ar /ap charge off under discount/credit

Solved
Best answer February 06, 2021

Best Answers
IamjuViel
QuickBooks Team

create write off item

Greetings, @TERESA Guardian.]

 

Deciding how to write off a small amount of customer invoice relies on your usual business process. You either create a Journal entry to write off the amount or apply discounts to remove small amounts. 

  1. Go to the Company menu.
  2. Select Make General Journal Entries.
  3. In the Make General Journal Entries window, enter the date and fill in the entry number if necessary.
  4. Choose the Account field and select Accounts Receivable from the dropdown list.
  5. Enter the amount under the Debit column, tab to the Name column, and select a Customer Name from the dropdown list.
  6. In the next line, select the offset account and enter the amount under the Credit column.  User-added image
    • The offset account is usually an Expense account.

Meanwhile, you can use discounts to write off small amounts. You'd want to make sure to create a Charge off Account and Charge-off item. You can follow these steps:

  1. From the Lists menu, choose Chart of Accounts.
  2. Select the Account button and choose New.
  3. Select Income, then Continue.
  4. Enter Minor A/R and A/P Charge-Off in the Account Name field and select Save & Close.

Create a Charge-off item:

  1. From the Lists menu, choose Item Lists.
  2. Select the Item button and choose New.
  3. Choose Other Charge as Item Type and select Continue.
  4. Enter Minor Charge-Off in the Item Name/Number field.
  5. Select Non-Taxable Sales in the Tax Code field.
  6. Select Minor A/R and A/P Charge-Off in the Account field.
  7. Select OK to save and create the item.

Now,  you can apply the discount. Here's how:

  1. From the Customers menu, click Create Invoices.
  2. Select the customer name in the Customer: Job field.
  3. Choose Minor Charge-Off in the Item field and enter the amount of overpayment.
  4. Click Apply Credits.
  5. Go to the credit in the Available Credits section (The amount of credit should match the amount of invoice).
  6. Pick Done to close the Apply Credits window.
  7. Click Save & Close.

You can read through this article for more detailed steps: Write off customer and vendor balances

 

Additionally, you can run the Customer Balance Summary report in QuickBooks Desktop. This displays your customer's current balance.

 

Lastly, I'd recommend consulting an accountant so you'd be guided in accurately tracking your transactions.

 

I'm only a post away if you have any other questions. Wishing you continued business success now and in the future.

View solution in original post

1 Comment
IamjuViel
QuickBooks Team

create write off item

Greetings, @TERESA Guardian.]

 

Deciding how to write off a small amount of customer invoice relies on your usual business process. You either create a Journal entry to write off the amount or apply discounts to remove small amounts. 

  1. Go to the Company menu.
  2. Select Make General Journal Entries.
  3. In the Make General Journal Entries window, enter the date and fill in the entry number if necessary.
  4. Choose the Account field and select Accounts Receivable from the dropdown list.
  5. Enter the amount under the Debit column, tab to the Name column, and select a Customer Name from the dropdown list.
  6. In the next line, select the offset account and enter the amount under the Credit column.  User-added image
    • The offset account is usually an Expense account.

Meanwhile, you can use discounts to write off small amounts. You'd want to make sure to create a Charge off Account and Charge-off item. You can follow these steps:

  1. From the Lists menu, choose Chart of Accounts.
  2. Select the Account button and choose New.
  3. Select Income, then Continue.
  4. Enter Minor A/R and A/P Charge-Off in the Account Name field and select Save & Close.

Create a Charge-off item:

  1. From the Lists menu, choose Item Lists.
  2. Select the Item button and choose New.
  3. Choose Other Charge as Item Type and select Continue.
  4. Enter Minor Charge-Off in the Item Name/Number field.
  5. Select Non-Taxable Sales in the Tax Code field.
  6. Select Minor A/R and A/P Charge-Off in the Account field.
  7. Select OK to save and create the item.

Now,  you can apply the discount. Here's how:

  1. From the Customers menu, click Create Invoices.
  2. Select the customer name in the Customer: Job field.
  3. Choose Minor Charge-Off in the Item field and enter the amount of overpayment.
  4. Click Apply Credits.
  5. Go to the credit in the Available Credits section (The amount of credit should match the amount of invoice).
  6. Pick Done to close the Apply Credits window.
  7. Click Save & Close.

You can read through this article for more detailed steps: Write off customer and vendor balances

 

Additionally, you can run the Customer Balance Summary report in QuickBooks Desktop. This displays your customer's current balance.

 

Lastly, I'd recommend consulting an accountant so you'd be guided in accurately tracking your transactions.

 

I'm only a post away if you have any other questions. Wishing you continued business success now and in the future.

View solution in original post

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