Good day, @EthanDale. I'll make sure you're able to keep your accounts updated and manage bad debts in QuickBooks Online (QBO) accordingly.
The accounts reflected in your journal rely on the account assigned when you create or add the product and services included on the invoice. Since you’ve mentioned that the bad debts still pop up when you make a payment, you’ll want to review the process of recording them into the program.
If you haven’t created a bad debt expense account, please follow the steps below:
- Go to the Gear icon and select Chart of accounts.
- At the upper right, select New to create a new account.
- From the Account Type ▼ dropdown, choose Expenses.
- From the Detail Type ▼ dropdown, select Bad debts.
- Enter Bad debts in the Name field.
- Click Save and Close.
Next, let’s create a non-inventory item to hold the bad debt.
- Go to Gear icon and select Products and Services.
- Select New, and then Non-inventory.
- Enter Bad debts in the Name field.
- Select Bad debts on the Income account ▼ dropdown.
- Tap Save and Close.
We can use the expense account we created to track the bad debt to close the customer's unpaid invoices. See the Step 4 - Step 5 of this article for the detailed steps: Write off bad debt in QuickBooks Online.
Please let me know if you have more questions regarding the process. If you have any other concerns with business accounts or transactions, I'll be right here to help you out again. Take care.
