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This chapter is from the book

This chapter is from the book

Recording Bad Debts

If your company keeps records on an accrual basis, you’ve already recorded income when a job is completed and invoiced, even though you haven’t yet received the payment from your customer. So when you discover that the customer isn’t going to pay, you need to offset the income you recorded with a bad debt expense.

  • orange_circle_1.gif Select Customers, Receive Payments, or click the Receive Payments icon on the QuickBooks Home page.
  • orange_circle_2.gif Enter the name of the customer and job, if applicable, for whom you will record a bad debt.
  • orange_circle_3.gif Leave the amount set to zero.
  • orange_circle_4.gif Click to place a checkmark to the left of an uncollectible invoice.
  • orange_circle_5.gif Click OK in the warning box.
  • orange_circle_6.gif Click the Discounts & Credits button.
  • orange_circle_7.gif Enter as a discount the amount of the uncollectible debt.
  • orange_circle_8.gif If necessary, change the discount account field to reflect the account where you record bad debt expenses.
  • orange_circle_9.gif Click the Done button.
  • orange_circle_10.gif Save the Receive Payments window.
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