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gloriadeb204
April 9, 2021
Solved

bad debt write off

  • April 9, 2021
  • 2 replies
  • 20 views

I wrote off a bad debt in ihe GJ as shown.

When I run an aging report, it shows up as a positive and a negative. How do I get it to not show up at all on an aging report? 

 

Best answer by AlexV

Hello gloriadeb204!

 

The reason why it shows positive and negative lines is because of the method you used, the journal entry. Let me show you how to properly write it off as bad debt.

 

Based on the screenshot, I'll assume you already have an expense account to track the bad debt. If so, proceed to these steps:

  1. From the Customers menu, select Receive Payments.
  2. Select customer in the Received from drop-down, and enter $0.00 in the Payment amount.
  3. Click the Discounts and credits button. 
  4. On the pop-up, enter the amount you'd like to write off in the Amount of Discount field.
  5. For the Discount Account, select the bad debt expense account.
  6. Tap Done, then Save & Close.

 

Once done, pull up the A/R Aging report again to verify.

 

Need more references on how to manage your business in QuickBooks Desktop? Check this link: QBDT All Articles.

 

Leave a reply below if you more of my help. I'll be here!

2 replies

AlexV
AlexVAnswer
Level 10
April 9, 2021

Hello gloriadeb204!

 

The reason why it shows positive and negative lines is because of the method you used, the journal entry. Let me show you how to properly write it off as bad debt.

 

Based on the screenshot, I'll assume you already have an expense account to track the bad debt. If so, proceed to these steps:

  1. From the Customers menu, select Receive Payments.
  2. Select customer in the Received from drop-down, and enter $0.00 in the Payment amount.
  3. Click the Discounts and credits button. 
  4. On the pop-up, enter the amount you'd like to write off in the Amount of Discount field.
  5. For the Discount Account, select the bad debt expense account.
  6. Tap Done, then Save & Close.

 

Once done, pull up the A/R Aging report again to verify.

 

Need more references on how to manage your business in QuickBooks Desktop? Check this link: QBDT All Articles.

 

Leave a reply below if you more of my help. I'll be here!

    M
    MarcelleW
    December 9, 2021

    I followed steps 1-2 but in Step 3, I do not see "Discounts and Credits" button anywhere on the screen

    A
    AmyOfficePro
    April 4, 2023

    @AmyOfficePro 

     

    Assuming you're cash basis, when an invoice is determined to be uncollectible and the bad debt expense is applied to the invoice, both the income from the invoice and the related bad debt expense will hit your P&L and will offset.  That is proper accounting.  Is that not what you're seeing?  


    No is not working / I do not want to see in Income. (?)  (so Income Balances; I do a separate spreadsheet from Bank Statements Deposits, to verify in Balance, as in past the way QB Online was posting, it wasn't showing certain items from Invoices/ payments received)

     

    I'm still seeing the Invoices on the P&L in the Income ("Contract Deposits" and as the Bad Debt Expense (therefore Income doesn't balance/ is inaccurate)..

    As instruction shows:  I created a "Credit Memo" selecting the "Bad Debt" Item, that I'd created to post to Expense "Bad Debt and Settled Invoices" - Re-reviewing that, I recall I chose "Non-inventory" and I tried selecting "I purchase this product/service from a vendor" to be able to see "Expense Account" and select "Bad Debt and Settled Invoices" and that wasn't posting accurately, so I tried (and currently is showing) checked box "I sell this product/service to my customers" to see the "Income account" drop-down, to select "Bad Debt and Settled Invoices" - This must be the issue = I tried changing back to "Expense Account" and it isn't changing anything.

     

    For now I've done Journal Entries to debit the "Contract Deposits" (so Income Balances), and posted the credit to an "Other Expense" I have "Ask Tax Accountant," therefore that shows at bottom of P&L. -  A resolution would be greatly appreciated.

     

    ~ Amy

    BigRedConsulting
    BigRedConsulting
    Level 15
    April 9, 2021

    This happens when the journal isn't linked to the invoice it's writing down. Same thing will happen if you record a Payment received transaction and don't apply it to invoices.

    To complete the transaction, open the Receive Payments window, select the customer, and then apply the outstanding credit to the open invoice(s).

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