When a particular invoice cannot be collected any longer, it needs to be written off, and declared as a bad debt in order to format the invoice out of accounts receivable and decrease your net profit by its amount.
Solution 1: Review the Accounts Receivable Aging report
Take a look your Accounts Receivable Aging Detail Report, before you consider it as a non-collectible debt. Please contact QuickBooks Support for more. We are always available at your service so make sure you do this. You can reach out to us whenever.
Step 1: Make sure you tap on Reports from the left menu bar.
Step 2: Write Accounts Receivable Aging where the search bar is located.
Step 3: Choose the Accounts Receivable Aging Detail
Solution 2: Build an account for write off bad debts in Quickbooks Online
In order to start the process, you need to build an amount for bad debts.
Step 1: You must tap on the Gear icon on the Toolbar.
Step 2: Under Your Company, press Chart of Accounts.
Step 3: Choose New.
Step 4: In the Account dialog, from the Account Type drop-down list, tap Expenses.
Step 5: From the Detail Type list you may now choose Bad Debts.
Step 6: Press Bad Debt in the name bar given in the screen.
Step 7: Choose Save and close.
The expense account has been made. Now next you must build a non-product or service item in order to identify the bad debt. In case you want further information, please contact, QuickBooks Online support for more.
Solution 3: Build a product/service item for the bad debt
If you are looking to build a product/service item for the bad debt:
Step 1: Select on gear icon, you will find it on Toolbar
Step 2: Click on Products and Services, under Lists.
Step 3: Select New.
Step 4: Now where the Product/Service information panel is located, press Non-inventory there.
Step 5: Enter Bad Debt, in the Name field.
Step 6: In the Income account field, tap on the Bad Debt expense account you have built.
Step 7: Erase the taxable checkbox.
Step 8: Choose Save and close.
The item is built. Next you will be creating a credit memo for the debt.
Solution 4: Make a credit memo for the debt
In order to create a credit memo:
Step 1: Choose the Plus icon (+) that is present in the Toolbar
Step 2: From the Customer drop-down list, tap on the client.
Step 3: Choose the Bad Debt item you built in the product sphere.
Step 4: Write the Amount of the unpaid invoices properly.
Step 5: In the memo bar, enter Bad Debt
Step 6: Choose Save and close.
Now we hope that you have read the article carefully and you have been able to resolve your problem. If you have not been able to do so, please make sure you are able to resolve your queries by reaching out to us at QuickBooks Online support and QuickBooks support. We are always here to provide you assistance so please make sure you count on us in need.