Negative Undeposited funds v. Bad Debt

Hi Fabiana,

Yes, we can offset the value of a negative deposit in the Undeposited Funds and clear these balances in the A/R.

It could be that the amount in the Undeposited funds is also the amount that appears in the Bad Debts. I'd suggest consulting for an accountant so they can advise us on how to offset the negative amounts and clear these balances in the A/R.

Don't hesitate to get back to us if you have further questions about the Undeposited Funds. We're always here to help.

---

@FabianaT wrote:

I have a negative balance under undeposited funds in my Balance Sheet but no "deposit" to match in the amount of ~$2K under "Bank Deposit".  I also have approx ~$2K in bad debts...can I offset one against the other and clear these balances in A/R? 

---

You need to find out why you have a negative balance in undeposited funds. Undeposited funds is supposed to hold payments you receive from invoices and sales receipts.

1. what transactions have you been posting to undeposited funds?

Bad debt should have been handled using a credit memo with an item that posts to bad debt expense, then in receive payments that credit memo is applied to the invoice that is not going to be paid.

2. What was your entry for bad debt?