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Writing off a bad debt

I am following the procedure for writing off a bad debt as found at the following link:

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However, When I am on the Receive Payments window, I get a bit lost. I enter the customers name, date, amount and then click the Set Credits button. Is that correct? Then I click Save and Close. I do not put a tick in the Applied to column.

It is left as Group with other undeposited funds. I fear this is wrong. Am I supposed to put a tick in the Applied to column and then Deposit to Accounts Receivable? If so, why?

I am using Quickbooks 2002.

Thanks,

Jon

Reply to
Jon
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Why do you have to enter anything? Isn't the invoice in the list so you can click it?

Reply to
Peter Saxton

Well, currently, following my procedure, I end up with an entry in the Undeposited funds account. Yes, the invoice is in the list. But there is a Set Credits button. Do I click that? What is it for?

Jon

Why do you have to enter anything? Isn't the invoice in the list so you can click it?

Reply to
Jon

I put an amount in the Amount Received box. Leaving it blank worked. :)

Jon

Why do you have to enter anything? Isn't the invoice in the list so you can click it?

Reply to
Jon

Peter- I use 2002 and (unfortunately) have recorded a few bad debts. After you pull up the customer name, make sure you leave the "amount" field in Receive Payments window 0.00. Then, put the check next to the outstanding invoice; you'll get a warning message; hit OK and the check turns into a black box. Next, go to set discounts. BUT BEFORE ALL THIS, you need to set up a Bad Debt Expense Account (or whatever you want to call it)in your chart of accounts. Then, when you set the discount, select that account. There are no "accounts to be received" so it is an expense to your company!

Hope this helps! Becky

Reply to
AJ DeLuca Contractors

By the way:

- You get the warning message if you select an invoice by clicking in the left-most column. Click anywhere else on the line to avoid the warning.

- You can create the Bad Debt Expense account within the "Set Discount" window if it doesn't already exist.

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