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Writing off a finance charge leaves client with credit in A/R

I'm using QuickBooks Pro 2006, and I wanted to write off a finance charge.

I followed the help by creating a credit for the client, with the item selected as "Bad Debt - Interest Charges". When I save this, it removes the balance on his account as viewed when doing a "Customer:Job List". And it shows up in the "Bad Debt - Other Expenses" on the "Financial Report".

The next step, according to the help wizard, is to receive a payment from the client. and use the "set credits" button. When I do this, it gives the client a credit in his A/R.

It is my understand that step two should only be clearing the "bad debt" from the A/R.

Two questions:

  1. Shouldn't my client's balance reflect as zero in the A/R ??
  2. Shouldn't there be a way to reduce income in the "Finance Charges" account?

I could just delete the F/C invoice, but I would like to track revenue lost as a result of some clients not paying their finance charges.

If I sound confused, it's because I am. It seems like this should be a simple process. Perhaps I'm viewing it incorrectly.

Reply to
rf
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The purpose of "Receive Payment" is to apply the existing credit to the customer account balance. This way, nothing shows up on various reports (i.e.. "Open Invoice", "A/R Summary"). You are not really receiving a payment and put no value in the amount received box. In QB 2006, you highlight the open invoice and then set the credit. No $ are added to "Undeposited Funds" nor the "Bank/Cash" account.

I hope I've understood your question and this is helpful.

Reply to
Joanne

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