How to Write Off Bad Debt in QuickBooks

Writing off bad debt in QuickBooks is necessary when a customer’s invoice becomes uncollectible. It allows you to account for the debt as a loss and adjust your financial statements accordingly. 

Here’s a step-by-step guide on how to write off bad debt in QuickBooks:

1. Run an Accounts Receivable (A/R) Aging Report
   1. Before you write off bad debt, you must identify the specific invoices you want to declare as uncollectible. Run an A/R Aging Report in QuickBooks to identify the outstanding invoices that qualify for a bad debt write-off.
2. Create a Bad Debt Expense Account
   1. If you haven’t already, create a Bad Debt Expense account in your Chart of Accounts. This account will be used to record the amount of the bad debt write-off.
3. Write Off the Bad Debt
   1. Go to the “Customers” menu and select “Receive Payments.”
   2. Choose the customer with the bad debt, then select the specific invoice(s) you want to write off.
   3. In the “Amount” field, enter the amount of the bad debt. This amount should match the total of the invoice(s) you are writing off.
   4. In the “Payment Method” field, select “Bad Debt” or a similar description.
   5. Click “Save & Close.”
4. Post the Bad Debt Expense
   1. Go to the “Banking” menu and select “Make Deposits.”
   2. Choose the account where you want to post the bad debt expense. Use the Bad Debt Expense account created earlier.
   3. In the “Received From” field, select the customer whose debt you’re writing off.
   4. Enter the amount of the bad debt as a negative number.
   5. Click “Save & Close.”

Writing off bad debt in QuickBooks is essential for maintaining accurate financial records. Make sure to follow these steps carefully to ensure accurate accounting for bad debt.