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VNAFL
Level 2

How do I undo an old bad debt write off and apply a new payment in current Year?

After a few years of trying to collect on an invoice from 2015, I received permission from my boss to write off the bad debt in 2019. Today, out of the blue, the customer made a payment for the full amount of the original invoice. Our company accountant has closed our books through 2019. How do I undo the old write off and apply today's payment (2020) to the old invoice without altering the books from previous years?

TYIA for your help!

Solved
Best answer September 08, 2020

Best Answers
ReymondO
QuickBooks Team

How do I undo an old bad debt write off and apply a new payment in current Year?

Hi there, @VNAFL.

 

You can delete the bad debt that you've created. This way, you can apply your customer's new payment to the invoice. Since you've already reconciled this account, then you need to reopen your book and undo your reconciliation. 

 

Just perform a mini-reconciliation in QuickBooks Desktop to create this adjustment. Please take note that before you proceed, please ask your accountant for further guidance. This will make sure that your book is accurate before creating any changes.

 

After opening your books, you can proceed to these steps to delete the bad debt:

 

  1. Go to the Customers menu and select Customer Center.
  2. Select the customer and find the bad debt transaction (shown as a discount), then click it to open.
  3. In the upper section, click the Delete icon and select Save & Close.

bad.PNG

Once done, you can now apply your customer's payment to the invoice.


When everything is fixed, you can finish reconciling your account and close your books.

 

In case you need to review your reconciliation report, you can follow these steps:

 

  1. Go to the Reports menu and click Reports Center.
  2. Search for and open a Previous Reconciliation report.
  3. Select the account you reconciled, choose either DetailSummary, or Both.

 

Don't hesitate to tag my name in the comment section below if you have other concerns or questions. I'm always ready to help.

View solution in original post

5 Comments
ReymondO
QuickBooks Team

How do I undo an old bad debt write off and apply a new payment in current Year?

Hi there, @VNAFL.

 

You can delete the bad debt that you've created. This way, you can apply your customer's new payment to the invoice. Since you've already reconciled this account, then you need to reopen your book and undo your reconciliation. 

 

Just perform a mini-reconciliation in QuickBooks Desktop to create this adjustment. Please take note that before you proceed, please ask your accountant for further guidance. This will make sure that your book is accurate before creating any changes.

 

After opening your books, you can proceed to these steps to delete the bad debt:

 

  1. Go to the Customers menu and select Customer Center.
  2. Select the customer and find the bad debt transaction (shown as a discount), then click it to open.
  3. In the upper section, click the Delete icon and select Save & Close.

bad.PNG

Once done, you can now apply your customer's payment to the invoice.


When everything is fixed, you can finish reconciling your account and close your books.

 

In case you need to review your reconciliation report, you can follow these steps:

 

  1. Go to the Reports menu and click Reports Center.
  2. Search for and open a Previous Reconciliation report.
  3. Select the account you reconciled, choose either DetailSummary, or Both.

 

Don't hesitate to tag my name in the comment section below if you have other concerns or questions. I'm always ready to help.

View solution in original post

VNAFL
Level 2

How do I undo an old bad debt write off and apply a new payment in current Year?

Thank you!

MorganB
Content Leader

How do I undo an old bad debt write off and apply a new payment in current Year?

It's great to see you received the assistance you were looking for, VNAFL. You can always count on the Community to have your back if you ever need a hand again in the future!

Fannyandtono
Level 1

How do I undo an old bad debt write off and apply a new payment in current Year?

I have just run into the same situation and I agree with the solution advised, however, I inquired our CPA and was told to ¨just record the deposit as income now as it is received¨. How do I do this when the invoices have already been zero out with a credit memo assigning the invoices in reference as a bad debt? thank you!

Adrian_A
Moderator

How do I undo an old bad debt write off and apply a new payment in current Year?

The suggestion of your CPA is also correct, Fannyandtono.

 

When receiving the deposit, ensure to select the account associated with the service/item that you've paid. You can add notes on the deposit for easy tracking on the Profit and Loss report. This process also helps you to apply the payment on your customer's next invoice.

 

As for the bad debt, you can create a Checking account affecting an Accounts Receivable account to offset the available credit. Also, it would be best to get in touch with your accountant for further guidance and for the correct way to link the deposit and the invoice with the credit memo.

 

Here's a reference on how we can write off bad debt: Write off bad debt in QuickBooks Desktop.

 

Keep me posted if there's anything that I can help. Keep safe!

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