You made a sale, but the customer has not paid the debt owed to your company. This will make the original invoice to go unpaid and will create a “bad debt.” Before you decide to record a bad debt, you should create a “bad debt account” to keep track of any such transactions. This action will help you to Write-Off Bad Debts in QuickBooks Online and use the Discounts and Credits option within QuickBooks. The debt will be recorded in this separate account, and this info will help you while doing taxes.
Not using the allowance method QuickBooks Online, there are various ways to handle the “Bad debts.” You need to keep consulting the accountant if you use the “Accrual Basis” accounting method with the following conditions:
If you submit the taxes on a cash basis, then ideally you should “void” the open invoices as they are not entered reported as income. To delete the invoices, follow the below steps:
When the invoice is voided, then reopen it and enter “bad debt” in the memo and select “Save.”
If the amount that is to be “written-off” affects the gross sales, in such a case, you should consult your accountant before doing any further entries. Ensure to have a “bad debt expense” account created.
Bad debts can create unnecessary and unexpected trouble for your business. Hopefully, the article was comprehensive in providing a solution and solving the issue. However, in case the problem persists, and you feel the need to speak to a technical expert, call QuickBooks Error Support Number 1-877-263-2742 and get your issue solved without a minute delay.
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