Deleting obsolete items in Accounts Receivable

nick25 · ‎March 26, 2023

Hello, I'd be grateful for your advice. Our CPA has completed our 2022 financial year-end, and has given us a batch of year-end journal entries to input into our QB. (The CPA has only accessed our QB Online for our end-of-year info, and does not wish to do any input/data entry.)
We can input the Journal Entries, but they include A/R debts written off. If we enter all the Journal entries, our A/R ledger will be left with obsolete items. May we simply delete the respective items/balances in A/R, or must we perform all those write-offs within our A/R in QB and not enter the respective JEs? (I know that the obvious answer is to write-off the bad debts within our QB A/R, but if we can just delete the balances in A/R, we could simply go in and enter all the JEs...

Rustler · ‎March 27, 2023

Do not use journal entries at all, QB does not like them, and reporting will be messed up or they will not be reported at all.

A/R that has not been paid, is a result of an invoice (a sale). If you delete the invoice then the sale did not happen and any inventory items used in the sale will return to stock, not something you want since those items have a cost that posted to COGS. Do not delete invoices.

in QB the only way to do this where everything works, is to create a service item linked to a bad debt expense account and use it on a credit memo per customer/per invoice

If your cpa understood QBO he would know this

View solution in original post

Rustler · ‎March 27, 2023

Do not use journal entries at all, QB does not like them, and reporting will be messed up or they will not be reported at all.

A/R that has not been paid, is a result of an invoice (a sale). If you delete the invoice then the sale did not happen and any inventory items used in the sale will return to stock, not something you want since those items have a cost that posted to COGS. Do not delete invoices.

in QB the only way to do this where everything works, is to create a service item linked to a bad debt expense account and use it on a credit memo per customer/per invoice

If your cpa understood QBO he would know this

nick25 · ‎April 02, 2023

Just a note to thank "Rustler", whose advice is always rock-solid.

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Deleting obsolete items in Accounts Receivable