Quickbooks is indeed the best software for handling all the hassle of taxes and payments for small to midsize businesses. But what differentiates it is even with some downsides like Quickbooks error, it’s still popular for many reasons. How to write off an invoice in QuickBooks
Now and then, you may face situations like payment and money problems; also, in some cases, customers give up and refuse to pay.
Understanding how to write off an invoice in QuickBooks, aka (bad debt), is crucial in these critical situations. This helps you to upgrade your account and net income from time to time.
In this article, we are going to examine the ways to write off an invoice in QuickBooks.
What are the reasons to write off an invoice?
There are many reasons to write off an invoice; some of them are listed below:
- The first scenario can take place due to clerical issues from the customer’s end. In this case, maybe the customer has paid his debt on your invoice, but a balance is still due on it. This can be a penny or a large amount; it all depends on the customer.
- The next common reason is when a customer hesitates to pay his debt or has some solid reasons behind not paying it, then as a business owner, you still have to deal with it.
This bad debt is important to note while maintaining a record for the same in Quickbooks.
Note: when you write-off an invoice, it will be noted as written off instead of paid or unpaid. In this case, the amount will be removed from the unpaid account and appear like a lost income.
Simple steps to write-off an invoice using the write-off invoices tool
Writing off bad debt can be a bonus for your expense balances since it gets updated without any manual work or headache.
Here’s how you can write-off an invoice using the write-off invoice tool; make sure you follow the steps given below.
- Click on Accountant tools and choose write-off invoices.
- Add the invoice age, To date, and balance less than filters to find the correct invoice.
- Then, click on Find invoices.
- Check the name of the customer in the respective column.
- Tick the checkboxes of the invoices you want to write-off.
- Then, select write-off.
- Now under the account drop-down, select the account you use for bad debts.
- Click Apply.
Steps to writing off an Invoice in QuickBooks Online
Here’s how you can write-off an invoice in QuickBooks. Follow the steps mentioned below:
Step1 Add an expense account and trail the Bad debt.
- Click on the list-menu and choose a chart of accounts.
- Go to the account menu and then click on new.
- Choose expenses and hit continue.
- Add a relevant name to the account.
- Click save and then close.
Step2 Close the unpaid invoices
- Move your cursor to the customer’s menu and choose receive payments.
- Now enter the customer name in the received from the field.
- Enter $0.00 as the amount in the payment.
- Click on discounts and credits.
- In the discount account field, enter the write-off amount you want to add.
- Click Done.
- Lastly, click on save and close it.
Maintaining each process is hefty, but following these steps, writing off an invoice can become smooth and easy.
Steps to write-off an unpaid invoice in Quickbooks online
In this feature, it’s important to record the number of times you tried to collect money from the debtor. Here are the steps to Write off unpaid invoices:
Create a Bad Debt item
- Click on the Settings icon and open lists.
- Choose products and Services.
- Choose New and then Non-inventory from the upper right section.
- In the name field, type bad debts.
- Now choose bad debts from the income account.
- Hit save and close.
A credit memo wants to be created for the bad debt.
- Click on the (+) new button and click on credit memo.
- Choose the customer.
- Click on Bad debt from the product/service.
- Now in the amount column, enter the amount you want to write-off.
- Lastly, type Bad debt in the statement box.
- Then hit save and close.
There are few more ways mentioned on the QuickBooks intuit website for writing-off an unpaid invoice in Quickbooks.
In the end, being prepared for any challenges in this fast-paced world is the key, and QuickBooks write-off features do the same for your business. I hope this article answered all your questions on how to write-off an invoice in QuickBooks.