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Diane18
February 11, 2021
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How do I enter a payment for a recorded bad debt

  • February 11, 2021
  • 1 reply
  • 0 views

Back in 2007, we wrote off an invoice as a bad debt.  Yesterday (Feb 10, 2021) I received a cheque in the mail for the full amount of the bad debt.  Can you believe that?  How do I record the deposit when it was written off?  How would I reverse it?

    Best answer by LauraAB

    You're welcome. I'm glad to hear you're working with an accountant. I hope this does turn out to be a simple solution for you. Your thought process on this makes sense, and it's just a matter now of making sure that's the right step to take for the integrity of your books. It's important that your numbers stay in balance and that the audit is sound so you don't run into problems later. :)

    1 reply

    L
    LauraAB
    February 11, 2021

    Hi Diane18,

     

    I hope you've been having a great week so far. That's quite the interesting situation you find yourself in, and I can definitely appreciate how a bad debt written off in 2007 with a payment now would be a challenge to manage from an accounting perspective. I'll point you in the right direction for this.

     

    Given the amount of time that's passed between the initial transaction and the payment receipt, and factoring in it being written off as bad debt, I strongly recommend reaching out to an accountant about this one to get their advice. It could be that you can simply delete the transaction created to account for the bad debt, or it might be more appropriate to record it as an entirely new transaction. Which is more correct here, I can't speak to since I don't have accounting training, and I want to make sure you get the right answers.

     

    I'm quite certain my team and I have shared this link with you in the past, but just to make sure you have it, our Find an Accountant page is great for researching and finding QuickBooks-certified professionals who can help you with your books. I recommend visiting that page if you don't already have an accountant so that you can connect with someone.

     

    I hope this helps you toward sorting this out. Take care!

    D
    Diane18Author
    February 11, 2021

    Thank you.  I thought I could just reverse the bad debt transaction.  We have an accountant so I will reach out to him.  Thank you for your input.

    L
    LauraABAnswer
    February 11, 2021

    You're welcome. I'm glad to hear you're working with an accountant. I hope this does turn out to be a simple solution for you. Your thought process on this makes sense, and it's just a matter now of making sure that's the right step to take for the integrity of your books. It's important that your numbers stay in balance and that the audit is sound so you don't run into problems later. :)

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