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Hotwire04
March 12, 2019
Question

How do I record no payment or clients that dont pay their bills as a loss in my quickbooks

  • March 12, 2019
  • 4 replies
  • 0 views
I have a client that is not paying x amount of dollars. How do I show that I lost money there?
How do I record that he isnt paying the invoice and therefore I am out the labour and material costs
Do I do an account to write off bad debt and create an invoice or a credit memo?
I am unsure how I can record not only that the invoice billed isnt paid now,it will never be paid and therefore I am at a loss for this job.

4 replies

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Countrymusicmom
March 12, 2019
Set up an Expense Account called Bad Debt.

Set up an Item called Bad Debt and link it to the Bad Debt Expense Account.

Create a credit for the customer and use the Bad Debt item.

Apply the credit to the outstanding invoice.

That will clear the outstanding invoice.

Your Profit & Loss will show the loss as an expense.
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clriley0125
March 12, 2019
I have a question with regard to your above answer CMM. We are a general contractor and occasionally underestimate on our jobs, and can only charge the customer what we estimated, or a close approximation. I want to show the loss on the jobbut it is not necessarily a "Bad Debt" because we didn't actually bill the cutomer the full amount, knowing we had overrun the time and materials. How would you suggest I post the loss in QB Pro, so that the job doesn't show a profit when it really didn't? I was told by an accountant who is not well versed in construction just to reduce the per hour rate and/or the markup rate to make the invoice match the income we recevied. That has never sounded right to me, but I'm not an accountant, just a bookkeeper, and trusted her opinion. Your thoughts would be appreciated!
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alwayslearning
December 10, 2019

I work in construction for a general contractor and we have this happen at least once a year.  In all actuality, say you bid the job at $2000, it actually costs $5000. You only invoice your customer the $2000 because that was the quote. The customer pays and you post the $2000. That's all - run the "profit & loss by job" report and it should show you your true loss if your items are set up correctly.   You should be showing a negative under Net Income for that job (if it was indeed a loss).  Be sure your dates for the report cover the time frame , to be safe I always make mine "This Fiscal Year". The report will pick up on all payroll expenses, payroll taxes, fuel expenses, etc. that have been allocated to that job.   

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AlexanderM
March 12, 2019
Are you using job costing? You report all of your expenses and claim them against a job. In the big picture your income is part of all of your income and your expenses are part of all of your expenses, the loss is buried in there. To see if you made any money on the job do a job cost report. Reports>Jobs, Time & Mileage
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    Joe187
    January 14, 2022

    Hi I was wondering if you could put me in the right way to pay a missed payment 

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    Nicknarp
    May 24, 2024

    I create a line item on the past due invoice (I use the generic "Sales" account) and put a negative quantity of one dollar (less 5% GST) to balance out the invoice. E.g., if they owe you $100, then your quantity is -95.24 and tax code is GST.

     

    DO NOT DO THIS IF YOU COLLECT PST IN BC. You're required to submit the PST you charge, even if you never collect. A friend of mine is a lawyer and has to judge how much to charge if they think the client will stiff them because they're liable for the PST in any case.

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