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C
Coop3
April 6, 2022
Question

Writing off unpaid invoices after previous year journal entry

  • April 6, 2022
  • 1 reply
  • 0 views

Last year at year end we did a General Journal Entry and  Credited - Allowance for Doubtful Account for the total amount a customer owed us in unpaid invoices - we Debited - Bad Debts and GST.  To note:  The invoices themselves still show up on my reminders as overdue, yet if I look at the customer as a whole  - it says they owe "0" most likely because of the General Journal Entry. Am I correct in thinking this is not a write off?

 

Assuming that General Journal Entry is not a write off, I would like to write it off this year before year end which is the end of this month.  Taking note of my previous General Journal Entry, what is the proper way to do this that will not negatively effect my year end reports and also get rid of the invoices in my reminders.  Do I do another journal entry? and if so, what would it be?  After that though, I'm sure the invoices will still show up in my reminders because the journal entry will not effect that.

 

I appreciate any help or insight you can give.

 

 

 

 

1 reply

T
Trish_T
April 6, 2022

Hi Coop3,

 

Having outstanding invoices at year end is rather concerning and must be recorded accurately to keep your accounts aligned and your books balanced.  In QuickBooks Desktop you can write it off as bad debt when invoices become uncollectible.  I'd be happy to show you how!

 

It sounds like you've taken the step to create an account to track the bad debt, but let's follow these steps, just to be sure:

 

1. Open the Lists menu and open the Chart of Accounts

2. Select the Account menu and then hit New

3. Choose Expense and then Continue

4. Enter an Account Name

5. When finished, hit Save and Close

 

Now you're ready to 'close out' the unpaid invoices.  Here's how?

 

1. Select the Customers menu and then Receive Payments

2. Type in the name of the customer in the Received from field

3. Enter $0.00 for the Payment amount

4. Select Discounts and credits

5. For the Amount of Discount, enter the amount you need to 'write off'

6. Select the account you added for the bad debt in step one for the Discount Account

7. Choose Done

8. Hit Save and Close

 

This will ensure your accounts receivable and net income stay up-to date.  You can also review your customers' open balances with the Accounts Receivable Aging Detail report.

 

Feel free to connect with us again if you have any other questions or concerns.  We're here for you!

C
Coop3Author
April 6, 2022

I see that this will finally get rid of the invoices being on my reminders… 

 

How will this effect the journal entry I did last year that took the total amount owed and credited allowance for doubtful accounts and debited bad debt? 

J
JamesM4
April 6, 2022

Hello Coop3. It's essential you know how this would affect the journal entry from last year. To ensure accuracy in your books, I encourage you to get in touch with an accounting professional for expert advice.  If you're not in contact with one, I encourage you to search for one on our website using this link here. I'll leave this question open so other community members can chime in and share their expert advice. In the meantime, feel free to ask other questions, I'm here to help you achieve your QuickBooks goals. 

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