How to Write Off An Invoice In QuickBooks In Simple Steps

QB allows you to record invoices whether or not they are paid. In the second scenario, unpaid invoices can lead to problems with inaccurate figures. You can deduct them using accounting software. You can use specific methods or a direct feature to learn how to write off an invoice in QuickBooks. As part of these methods, creating bad debts and entering credit memos is required in QuickBooks Desktop. The write-off invoices feature is available in the Online Accountant version. Thus, clearing such financial documents is dependent on the software version and the information you have. Here you will read about how to write off an invoice in QuickBooks in simple steps and if you want to know more about QuickBooks features like how to integrate Shopify with QuickBooks commerce and how to create and email an invoice in QuickBooks mobile then click on these links.

Why Should You Write off an Invoice in QuickBooks?

As a business owner, you’ve probably encountered a situation in which customers refuse to pay their bills. It could be for any number of reasons. They may be unable to pay due to technical difficulties or are unwilling to pay. As a result, these invoices are rendered ineffective. Simultaneously, you cannot keep these unpaid invoices because you may be required to pay sales tax that you did not collect. As a result, the best option is to write off an invoice in QuickBooks.

• When you write off your invoices, you can save the important details for later use.
• It will assist you in keeping track of the percentage of invoices written off.

You may delete an invoice in QuickBooks. It then becomes unbilled. Hence, you may rather mark it as uncollectible should you require to bill it later.

How to Write off Invoices in QuickBooks Desktop?

The Customers menu in QuickBooks Desktop makes it simple to write off invoices. It allows you to include bad debt. You may make reference to the item in relation to the debt. It is possible to include it in the invoice? That invoice should later be marked as unpaid. Please ensure that all of the values are correctly added while learning to write off invoices in QuickBooks Desktop.

• On your computer, launch “QuickBooks Desktop.”
• Navigate to the “Customers” tab in the top menu bar.
• Select “Customer Centre” from the drop-down menu.
• When the new window opens, enter the customer’s name on the left.
• Select the invoice from the available options.
• Now, from the top, click on the “Customers” tab once more.
• Choose “Create Credit Memo/Refunds” from the drop-down menu.
• When the “Credit Memo” window appears, enter the customer’s name. Mention the due date for the invoice as well. The credit memo number will be filled in automatically.
• Create a “Bad Debt” by selecting the “Item” option.
• How to Write Off An Invoice In QuickBooks In Simple Steps
• Then, select “Add New” from the drop-down menu.
• Choose “Other charges” as the type.
• Then, click on “Item” and select “Bad debt.”
• Create a product by using the “Bad debt” item you created.
• Remove the check mark from the “Is Taxable” option.
• Select the “Save and Close” option.
• Mention the fictitious amount of the unpaid or bad debt here.
• Select the invoice to be written off.
• Then, at the top, select “Use the credit to apply to invoice.”

How to Write off Unpaid Invoices in QuickBooks Online?

In order to mark any uncollectible invoices in QuickBooks Online, you must first create credit memos and bad debts. The method can also include information about the customers, products, and services. You can use a simple feature in QuickBooks Online Accountant to write off an invoice. It has the same name and allows you to delete the document with limited information.

Method 1: In QBO

Because there may be no direct option in QuickBooks Online to write off unpaid invoices, you will need both bad debts and credit memos. You can create a new memo and then mention the associated bad debt item. The amount you include can later be highlighted as unpaid. When you save the information, the process of writing off the document will be completed gradually.

• Enter your “QuickBooks Online” account information.
• Open the invoice that you want to deduct.
• Choose the “+New” icon.
• Select the “Sales” option.
• In the step, select “Customers.”
• Fill in the correct customer name. Then, from the provided list, select the invoice.
• Now, in QuickBooks Online, create a new credit memo.
• When a “Credit Memo” window appears, enter all required information for the unpaid invoice, such as the customer name, date, and billing address.
• Then, in the “Products and Services” section, create a bad debt item.
• Make use of the “Add New” button.
• When a new window appears, name it “Bad Debt.”
• Also, choose “Bad Debt” for:
• “Account Category”
• “Category”
• Navigate to the “Gear” icon.
• Please select “Products and Services.”
• Add one new product and call it “Bad Debt.” Also, select this account.
• Mention the amount you are deducting from the invoice.
• You can also choose to enable “Sales Tax.”
• The data is then saved.
• Use “+New” to put this “Credit Memo” into action.
• Continue with “Receive Payment.”
• Choose the invoice and customer you want to write off in the “Outstanding Transaction” section.
• Now navigate to the “Credit” section. Choose the memo you made earlier.
• The amount should be zero after applying this credit memo.
• Select “Save and Close.”

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