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gloriadeb204
April 9, 2021
Solved

bad debt write off

  • April 9, 2021
  • 2 replies
  • 19 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!

    G
    gloriadeb204Author
    April 11, 2021

    Thank you.

    I will do this tomorrow when I get to work.

    Since 2020 financials are at our accountant, will doing this affect the financials?

    Rose-A
    Rose-A
    Level 10
    April 11, 2021

    Yes, doing this will affect your financials, gloriadeb204.

     

    In any case, accounting write-offs serve two purposes:

     

    • Firstly, write-offs support accounting accuracy objectives.
    • Secondly, the "write-off" creates tax savings for asset owners. These actions reduce tax liability by creating (non-cash) expenses that result in lower reported income.

     

    This process ensures your accounts receivable and net income stay up-to-date. I'd suggest working with your accountant to make sure your reports are accurate.

     

    You can take a look at this article: Write off bad debt in QuickBooks Desktop. This will give you the step-by-step process of writing off bad debt.

     

    Additionally, you can visit the following write-up: Sales and customers. This will provide you links on how to manage your company income as well as resources about other customer-related concerns.

     

    I'm only a post away if I can be of additional assistance or need more help with QuickBooks. I'm always here to keep helping. Wishing you a wonderful rest of the week.

    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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