How to write off bad debt in QuickBooks desktop? +1-888-412-7852

Indeed, QuickBooks is an accounting software that handles the financial activities of your business. Besides, the accounting software gives you the permission to record and write off bad debt. So before knowing how to write off bad debt in QuickBooks desktop, you need to understand what is bad debt in QuickBooks. 

Bad debt is an amount that a company or a business fails to recover from the debtor. It occurs when the borrower becomes bankrupt and he/she is unable to the pay on time. Most importantly, bad debt affects the profit and loss reports during the time of reconciling the accounts. 

Note: If invoices you send in QB become uncollectable, then you need to add it as a bad debt. It makes sure your accounts receivable and net income stays up-to-date. 

Let’s find out the benefits to write off and then move ahead for the steps to write off bad debt in QB. 

Benefits to write off bad debt in QB

1.    Your invoices from the accounts receivable will be cleared.

2.    You will not face any sort of miscalculations in profit and loss reports and in your income statements.

3.    At the moment when you try to update the bad debt, invoices become collectible. 

4.    Easy for the admin to manage accounts activity. 

After knowing the benefits to write off bad debt in QB, let’s know the steps for the same. 

Steps to Write off QuickBooks bad debt

Follow the given steps to write off bad debt in QuickBooks desktop:

Add an expense account to track the bad debt

1.    First, go to the lists menu and then you have to click chart of accounts.

2.    Now, you need to click on the account menu. With this, click on new.

3.    Next, you have to click on expenses and then continue.

4.    You have to add an account name.

5.    Lastly, you need to click on save and then close.

Close the unpaid invoices

1.    Initially, you need to click on receive payments.

2.    Now, you have to add the name of the customer.

3.    You need to add $0.00 for payment amount.

4.    Next, you need to click on discounts and then credits.

5.    Add the amount that you have to write off.

6.    Click on the account that you have added in step 1. Click on done.

7.    Finally, you need to click on save and then close.

We hope that you have understood how to write off bad debt in QuickBooks with the help of the above-steps.

Conclusion

With the help of the blog, hopefully you have understood what is bad debt and how write off bad debt in QuickBooks desktop. Apart from this, you will also get the idea of the advantages of QuickBooks write off bad debt. The step by step instructions will help you to know its process. 

If you want to get additional information related to write off bad debt in QuickBooks desktop , then dial the QuickBooks Toll- Free Support Phone Number 1-888-412-7852.