Quickbooks--How do you "write off" a bad debt/invo

[WISE]

I have an invoice that apparently I will never see payment on...

How do I write that off?

I set up and expense account as write off and was going to add that to the accounts list that payments could be posted to; however, I am not sure that is right.

So--Invoice is $105 in accounts rec. now--need to get it out of there--Don't want to delete it, I want to show it as work we didn't get paid on?

Any ideas?
Thanks

WISE

 

[Scott]

Re: Quickbooks--How do you "write off" a bad debt/

I have an invoice that apparently I will never see payment on...

How do I write that off?

I set up and expense account as write off and was going to add that to the accounts list that payments could be posted to; however, I am not sure that is right.

So--Invoice is $105 in accounts rec. now--need to get it out of there--Don't want to delete it, I want to show it as work we didn't get paid on?

Any ideas?
Thanks

WISE

I'm using Peachtree, but QB is probably similar.

If you haven't already done so, create an invoice for the transaction

Apply a Receipt to "Bad Debts" cash account in the amount you're writing off. In this case it's the full amount - $105.

That'll pull it out of ACC REC and put it into the Bad Debts account. At the end of the year, your accountant will print out a trial balance and apply the credit accordingly.

Scott

Scott

 

[truckmount girl]

Create an expense account called "Bad Debts" or "Pricks Who Don't Pay" or something like that.

Go to the Customers menu and click Receive Payments.

Select the name of the customer from whom you incurred the bad debt.

Leave the amount field at 0.00.

Put a checkmark in front of the line item that will not be paid. This item will appear on the Discount tab of the Discounts and Credits window.

If your Sales & Customers preferences are set to automatically calculate payments, the amount this customer owes will be filled in for you as soon as you enter the checkmark. Dismiss the message about the payment preference and enter 0.00 in the Amount field again.

Click Discount & Credits.

Your bad debt expense account should already appear in the Discount Account field on the Discounts tab.

Enter the amount of the bad debt in the Amount of Discount field.

Click Done in the Discount and Credits window.

The procedure described above does not affect your sales tax liability.

In the Receive Payments window, save the bad debt transaction.

Hope you don't get too many of these!

Take care,
Lisa

 

[WISE]

Scott--That is how I was thinking, but now I think Lisa has it right for QB's. Thanks.


Lisa THANKS alot. Hope I don't use that much!!!

I went with the MF'ers account title.


Thanks again

WISE

 

[Scott]

Scott--That is how I was thinking, but now I think Lisa has it right for QB's. Thanks.


Lisa THANKS alot. Hope I don't use that much!!!

I went with the MF'ers account title.


Thanks again

WISE

Wow, Lisa, I'm impressed indeed! You just picked up QB not long ago.

Mike, just for fun - check your MF'er account to make sure it's in there and ACC REC has debited the offset amount. When I was first learning Peachtree several years ago I mistakenly had one of my vendor accounts defaulted to "Equity".

At the end of the year my accountant (who is EXTREMELY anal) yelled at me.

I like him for that. Really.

Scott

 

[Guest]

If you do cash accounting it doesn't matter. No money was deposited so it doesn't show as a deposit. You will have your typical expenses for the job that will be a write off.

If you do accrual accounting then do as Scott and Lisa told you.

Dave

 

[bobrog]

Mike, call me and I'll walk you through it. The fact is you are using cash accounting on your taxes. When you do taxes and do a Quickbooks cash print of your profit & loss, it doesn't show up because you only report actual invoices paid. You can't write off what you haven't reported as income in the first. If you don't follow the QB instructions, you will show a writeoff of expense to which aren't entitled. You have already reported your expense in Cost of Goods and payroll. IRS auditors look for that. Don't be another Al Parish (inside joke)

Look under Quickbooks Help for bad debt and writeoff. It will walk you through it. Basically, Lisa copied the bad debt instructions for you from QB. But you also need to read writeoff. When you do this you will have your bad debt tracked in accrual accounting, but it won;t affect your cash accounting.

Consider my $250 per hr fee written off.

 

[truckmount girl]

Yep, Bob's right, I just copied it from the QB help menu...which I consult often. I like the "ask a question" box.

Take care,
Lisa

 

[WISE]

I must have asked this before cause I already had a write off account set up--changed the name to the more appropriate MF'ers!

Anyway--Thanks again guys/gal . Bob let me know if you get any QB upgrades through your other business :wink:


Precc'


WISE