Bad Debt Write Off

[Wendy Mccoy]

I found this attachment on the internet on how to write off bad debts, it is so much easier than doing journals etc. I spoke to my accountant and she said it is perfectly fine to do it this way and that she did not know about this way and agrees it is much easier, so read and follow instructions, it makes life nice and easy.

wendy

[tupham]

Thanks for taking the trouble to post this advice Wendy. I have been using the recommended method for several years and it works a treat.

[eric9090]

This is a positive contribution Wendy. It is a great help. Thanks for sharing mate

[CertifiedSEO]

Originally Posted by Wendy Mccoy

I found this attachment on the internet on how to write off bad debts, it is so much easier than doing journals etc. I spoke to my accountant and she said it is perfectly fine to do it this way and that she did not know about this way and agrees it is much easier, so read and follow instructions, it makes life nice and easy.

wendy

Hi Wendy; What is the best way to write bad debt off for previous years 2009, 2010, and 2011 ? for example can write a bad-debt off from 2010 in 2013. I do not think I can collect them anymore.
thanks

[Wendy Mccoy]

Because the bad debt is more than a year old should make not diff.

[CertifiedSEO]

thanks Wendy, take care.
Lewis

[Theresa Riley]

The method you are using seems to only apply to accrual account so you have a simple way to write off bad debt for cash accounting?
Quickbooks online suggests the correct way to write off bad debt is to void or delete the open invoices since they have not been recorded as income.

[Joe Williams]

In true cash accounting, there are no Bad Debt since ONLY PAID invoices are entered. That is why QuickBooks mentions VOID for Cash Basis Invoices that are considered BAD DEBT.

[Wendy Mccoy]

If you void the invoice then how do you write off the bad debt, goods have been produced and been delivered to customer and customer has paid perhaps some or none, you have paid out money for the goods sometimes large amounts so how would you write this off, as it is a bad debt and you are out of pocket with expenses etc.

EG part paid account total amount $54,000.00 there is still $37,000.00 outstanding period of time 12 months or more the company has gone bankrupt with no chance of getting the money that is owed the goods are on several invoices, different addresses, have been delivered and installed.
We use cash accounting so we only have to pay gst on what has been collected each month, not everything entered.

What would you do my accountant says this is a bad debt and says we are to use cash accounting.

Invoices are entered before they are paid for with every customer this is not a shop it is a manufacturing business and people order and pay later