Hello! I have a couple of customers who are not paying their invoice and therefore need to take a loss on them. How do I document this in Quickbooks? Thanks in advance!
I've got you covered, Kfasthoff.
We have just the steps that'll help record the bad debt. Let me walk you through the entire process:
Create an account for the bad debt
Click the Gear icon and choose Chart of Accounts.
Name the account, for example, Bad Debt.
Select Save and close.
Create a Product/Service item
Click the Gear icon.
Select Products and Services.
In the Product/Service information panel, select Non-inventory.
Name the item, for example, Bad Debt Item.
Clear the Is taxable checkbox.
Click Save and close.
Create a credit memo for the bad debt
Click the Plus (+) icon.
Choose the customer from the Customer drop-down list.
Apply the credit memo
Under Customers, choose Receive Payment.
Select the customer from the Customer drop-down list.
All of this information and more is available in our guide on how to write off bad debt.
That should do it. With these resources, I'm confident that you'll be able to document this like a pro in no time!
Please keep in touch if you need further assistance with this, or if there's anything else I can do for you. Thank you for reaching out, wishing you and your business all the best.