How to Write Off Bad Debt in QuickBooks Online | Scribe

    How to Write Off Bad Debt in QuickBooks Online

    • |
    • 0 step |
    • 2 minutes
    Login to your QuickBooks Online account
    Before writing off bad debt, it's essential to review the outstanding invoices and identify the specific ones that are uncollectible. Make sure you have exhausted all collection efforts before proceeding.
    To properly track bad debt, you need to create an expense account specifically for this purpose. First , select the gear (settings) in the top right hand side of the web page.
    Select "Chart of accounts"
    Click "New" to create a new account.
    From the Account Type dropdown, select Expenses.
    From the detail type, select Bad Debts.
    In the account name field name it something like, "Bad Debts," "Bad Debt Expense" or "Uncollectible Accounts."
    Click "Save"
    Now you will have to create a specific product for bad debts. Click the gear icon.
    Click "Products and services"
    Click "Add a product or service"
    Click "Non-inventory"
    Name it "Bad Debts" or something similar.
    Click the "Income account" field.
    Select the expense account you created in previous steps.
    Click "Save and close"
    Now, you need to create a credit memo to remove the unpaid amount from the customer's account. Go to "Get paid & pay"
    Click "Customers"
    Select the customer with the bad debt you need to write off.
    Was this Scribe helpful?
    Save this document for future reference.
    click-target-circles-background
    This Scribe is in tip-top shape!Leave feedback if there are any issues with this Scribe