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RebeccaH
Level 3

What do I do with an Invoice a customer refuses to pay?

I have 3 customers who refuse to pay. Thay have been in my records since 2019. I'm ready to take a loss. How do I get it off my A/R Aging Report?
Solved
Best answer May 07, 2021

Best Answers
Adrian_A
Moderator

What do I do with an Invoice a customer refuses to pay?

We'll have to write off bad debts, RebeccaH.

 

Let me guide you how:

 

First, let's run the Accounts Receivable Aging Detail report to review other invoices or receivables that should be considered as bad debt.

 

Second, we'll have to create a bad debt expense account. 

 

  1. From the Accounting tab, select Chart of Accounts.
  2. Click New.
  3. On the Account Type field, select Expenses.
  4. From the Detail Type, select Bad debts.
  5. In the Name field, you can enter Bad debts.
  6. Select Save and Close.

 

Afterward, let's create a bad debt item.

 

  1. Select Products and Services, from the Sales tab.
  2. Click New.
  3. Select Non-inventory.
  4. Give it a Name.
  5. From the Income account drop-down, select Bad debts.
  6. Select Save and Close.

 

Then, let's create a credit memo. You can enter Bad Debt as the Message displayed on statement.

 

Lastly, we'll have to link the credit memo to the invoice. I've added this reference for more information about the process: Apply the credit memo to the invoice.

 

When you're ready to reconcile the statements, you can check this guide: 

 

I'm just a post-away if you have other concerns about bad debts. Keep safe!

View solution in original post

3 Comments 3
Adrian_A
Moderator

What do I do with an Invoice a customer refuses to pay?

We'll have to write off bad debts, RebeccaH.

 

Let me guide you how:

 

First, let's run the Accounts Receivable Aging Detail report to review other invoices or receivables that should be considered as bad debt.

 

Second, we'll have to create a bad debt expense account. 

 

  1. From the Accounting tab, select Chart of Accounts.
  2. Click New.
  3. On the Account Type field, select Expenses.
  4. From the Detail Type, select Bad debts.
  5. In the Name field, you can enter Bad debts.
  6. Select Save and Close.

 

Afterward, let's create a bad debt item.

 

  1. Select Products and Services, from the Sales tab.
  2. Click New.
  3. Select Non-inventory.
  4. Give it a Name.
  5. From the Income account drop-down, select Bad debts.
  6. Select Save and Close.

 

Then, let's create a credit memo. You can enter Bad Debt as the Message displayed on statement.

 

Lastly, we'll have to link the credit memo to the invoice. I've added this reference for more information about the process: Apply the credit memo to the invoice.

 

When you're ready to reconcile the statements, you can check this guide: 

 

I'm just a post-away if you have other concerns about bad debts. Keep safe!

RebeccaH
Level 3

What do I do with an Invoice a customer refuses to pay?

THANK YOU !!!

I appreciate your time and effort to help me with this issue!!

JasroV
QuickBooks Team

What do I do with an Invoice a customer refuses to pay?

You're always welcome, Rebecca.

 

I'm glad the steps shared by my colleague above help fix your issue.

 

Moreover, I want to ensure you get most out of your QuickBooks Online (QBO) account. Let me add this article that you can use for reference in reconciling your accounts: Reconcile an account in QuickBooks Online. This link can walk you through the steps in matching your bank and QuickBooks balance seamlessly.

 

If there's anything else you need help with QuickBooks, you can always leave a reply in this thread. You're always welcome in the Community. Have a great day ahead!

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