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I have a customer that has chosen not to pay the rest of the invoice. Its still open with a balance. How do I clear it out?

 
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QuickBooks Team

I have a customer that has chosen not to pay the rest of the invoice. Its still open with a balance. How do I clear it out?

We can record a bad debt and then write them off, kevinangell.

 

When send invoices in QuickBooks and our customer chose not to pay it, we’ll write of a bad debt. Doing this will ensure that our Accounts Receivable and net income is up-to-date.

 

If we know the amount to write off, let’s proceed in creating a Bad Debt expense account and a bad debt item. Then, we’ll create a credit memo for it that we’ll apply to invoice that was partially paid.

 

Create Bad Debt Account expense account

  1. From the left menu choose Accounting and select Chart of Accounts.
  2. At the upper right, select New.
  3. From the Account Type ▼ drop-down menu, select Expenses.
  4. Select Bad debts in the Detail Type ▼ drop-down.
  5. In the Name field, enter something like “Bad debts.”
  6. Select Save and Close.

Enter a Bad debt item from the Credit Memo page.

  1. Go to the + New button and click Credit memo.
  2. Select the customer’s name and the rest of the information.
  3. In the Product/Service section, select + Add New.
  4. Select Non-inventory as the item type.
  5. Enter the item details and select Bad Debts (expense) in the Income account drop-down.
  6. Click Save and close to go back to the credit memo page.
  7. Enter the amount to write off and then Save and close.

Apply the credit memo to the existing invoice

  1. Select + New and select Receive payment.
  2. Choose and click the correct customer to show the existing invoice and credit.
  3. In the Outstanding Transactions section, select the invoice.
  4. From the Credits section, select the credit memo.
  5. Select Save and close.

We can keep track of our bad debts by running the Bad debts report. 

 

If there's anything else that you need help with, just mention me in you reply. Take care!

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