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SianM
June 8, 2023
Question

write off stock lost when customer went into administration

  • June 8, 2023
  • 1 reply
  • 0 views

I use quick books self employed, I create and sell comic books. 

 

A wholesaler went bust about a year ago and they held around £1500 of our stock. We have just received a cheque £7.72 from the administrators which is our share of the remaining funds after secured loans have been repaid. 

 

My question is, how do I show this in my accounts? do I just pay in the cheque as income, delete the invoice and thats it? I think that's right as the cost of goods for resale went out already so there is nothing else to do (other than be frustrated that all that stock has gone and we are going to spend money again to reprint).

 

Thanks

1 reply

Q
QueenC
June 8, 2023

I appreciate you for notifying us of your concern in the most detailed way possible, @SianM. 

 

I know these are trying times and I'm here to provide some suggestions that you can consider in writing off stock lost in QuickBooks Sefl-Employed.

 

In terms of recording the stock loss and the funds received from the administrators, I'd recommend the following approaches:

 

Before doing so, I'd suggest getting in touch with your accountant as matters like this are best handled by them. They can provide you with expert advice on how to properly record these based on the type of business you're running. If you don't have one, refer to this link: Find a QuickBooks Certified ProAdvisor.

 

  • Record the stock loss: Since the stock held by the wholesaler is now deemed lost, you should reflect this in your accounting records. You can do this by creating an expense entry to write off the value of the lost stock. If you're unsure about the specific accounts to use or how to record this, it's best to consult an accountant.

 

  • Record the funds received: When you receive the cheque from the administrators, you can record it as income. By categorising it as income, you're accounting for the funds you've received to offset the stock loss.

 

  • Adjust invoices and delete transactions: If you had previously issued invoices to the wholesaler for the stock they held, and those invoices remain unpaid, you can adjust them to reflect the stock loss. In QBSE, you can modify the invoice and mark it as fully paid by applying the funds received from the administrators. If you had any outstanding expenses related to the stock, you may need to delete those transactions as well.

 

Remember to keep documentation of the stock loss, correspondence with the administrators, and any other relevant records for your reference and for potential future audits.


Again, I'd still suggest consulting with a qualified accountant or tax advisor who can review your specific situation and provide personalized advise based on your business needs and the applicable accounting regulations in your jurisdiction.

 

Additionally, here's an article that you may find helpful in categorising your transactions: Schedule C and expense categories in QuickBooks Self-Employed.


You can always count on me if you have further questions with regard to writing off stock lost in QuickBooks Self-Employed. Just hit on the Reply button and I'll be right here to assist you. Have a good one.

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