How to handle reduced balanced due for overdue invoices

Are you cash or accrual based company?

I would do what ever you think will get some money out of the customer. Maybe offer them a discount and a payment plan??

If you are a cash basis then just delete or void them. You have not recognized the charges as income (you won't until paid) so deleting or voiding them won't impact the financials.

If you are an accrual based company then you need to record the Bad Debt. First create an expense account called Bad debt. There are several ways you can do this but here is one easy way to do this (from the QB help file):

1. Go to the Customers menu and click Receive Payments.
2. Select the name of the customer from whom you incurred the bad debt.
3. Leave the amount field at 0.00.
4. Click on the line item that will not be paid to highlight it.
5. Click Discount & Credits. Your bad debt expense account should already appear in the Discount Account field on the Discounts tab.
6. Enter the amount of the bad debt in the Amount of Discount field.
7. Click Done in the Discount and Credits window.

Note: The procedure described above does not affect your sales tax liability.

1. In the Receive Payments window, save the bad debt transaction.

If you are a cash based company, then there is no tax deduction (you can't write off what you did not write on). For accrual based companies, then you record the amounts not received as Bad Debt.

Laura, I'm using accrual method. This is just the information I needed. I appreciate your help.

Gary