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P
PPL2
June 7, 2022
Question

Allocating funds received from one customer to a different customer

  • June 7, 2022
  • 1 reply
  • 0 views

Hi,

I'm not an accountant, so this may be obvious to some, but not me! :-)

 

I'm a property manager, and I took over the management of a complex of apartments. The previous management company had funds on account, which they transferred to the client bank account I manage for the complex. So far so good.

 

I created the previous management company as a customer and created a payment from them, so the client account has the correct balance. 

 

The problem is that part of the funds I received was a bad debt payment 

 

1 reply

J
JonpriL
June 7, 2022

Good work, @PPL2.

 

I'll help enter bad debt funds in QuickBooks Desktop.

 

Let's first create a new expense account and use it to write off the bad debt payment made by your customer. I'll show you how.

 

  1. Go to Lists.
  2. Select Chart of Accounts.
  3. Under Account, select New.
  4. Choose Expense.
  5. Enter Bad Debt as the name of your new expense account.
  6. Click Save and Close.

 

Then, here's how you can enter the funds you received from your customer:

 

  1. Open the unpaid invoice related to the customer in question.
  2. Enter $0.00 as the amount received.
  3. Select Discounts and credits.
  4. Under Amount of Discount, enter the amount of the bad debt payment.
  5. On the Discount menu, select Bad Debt.
  6. Click Save and Close.

 

In addition, here's an article you can read to learn more about recording bad debt: Write off Bad Debt in QuickBooks Desktop.

 

However, I still recommend contacting your accountant for best accounting practices to follow in recording this type of transaction. If you haven't yet, here's a link you use to find someone you can work with: QuickBooks Certified ProAdvisor.

 

Lastly, I'm adding this article for topics to use while recording the common customer transactions: The Customer Transaction Workflows in QuickBooks Desktop. Subtopics like how a certain workflow is entered based on the other payment method used by your customers.

 

It'll always be my pleasure to help if you've got additional questions about recording funds and customers' activity in QuickBooks. Use the Reply option below to leave a comment and surely I'll be here ready to assist you. Take care @PPL2!

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