How do I write off a bad debt, what entries do I pass?

Steve Adamek

Lauren Roe

Hi Steve

The steps involved in writing off a bad debt depend on what version of Reckon/Quickbooks you are using, but here is my recommendation for the most current version.

Create a new Expense Account called 'Bad Debts Written Off' or something similar.

You also have to create a new Item (type is Other Charge) and link it to the Bad Debts Written Off Expense Account just created.

In the Refunds & Adjustments Screen, you select the Customer and the Item is the Bad Debt. In the description field, enter as much information as possible about the invoice to be written off, e.g the Invoice # and date. Enter the amount to be written off and also select the same tax code as used on the original invoice.

Hit save and close - a message will pop up asking what you would like to do with the credit. You want to click 'Apply to an Invoice'. Another window will pop up displaying the invoices for the customer in question - make sure you select the correct invoice that you are writing off.

Once this has been done, check your A/R Ageing Summary - the debt should not appear on the list.

Lauren

Jo Harty

I am using Reckon hosted i have an expense account set up already but it does not appear to be linked to an item as you mention to enable me to proceed. could you please confirm how i do this. Jo

Graham Boast

This site has an excellent article on bad debts.

http://www.reckonhelp.com.au/Help/QuickBooksHelp/Handling%20Bad%20Debts%20in%20QuickBooks.pdf

(disclosure: I may have written the article myself so you really shouldn't take my word for its excellence)


Graham Boast
Reckon Accredited Partner
graham@reckonhelp.com.au

Joseph Tantaro

Thanks Lauren, read it out to my wife and it worked...Yah