Bad Debts

[Vickidivoo]

I have a couple of bad debts - the customers have paid part of the respective accounts, but I feel quite sure that I will never get the remaining amounts. I have read the section on bad debts in Quickbooks Help but it says that when you enter a bad debt, it will not reflect the GST involved. Does that mean that I will have to deduct the amount of GST already paid (cash basis) manually from my current BAS? I would appreciate any help.

[qbqcca]

Originally Posted by Vickidivoo

I have a couple of bad debts - the customers have paid part of the respective accounts, but I feel quite sure that I will never get the remaining amounts. I have read the section on bad debts in Quickbooks Help but it says that when you enter a bad debt, it will not reflect the GST involved. Does that mean that I will have to deduct the amount of GST already paid (cash basis) manually from my current BAS? I would appreciate any help.

I would enter a Credit note for the each of the Customers Balances.
First you need to add an item named "Bad Debts" charging it to your Bad Debts Expense Account. If you don't have one, it should be set-up as account type "Other Expense".

When you enter the Credit Note you have to back out the GST then enter the net amount on the "Bad Debt" item line with the appropriate Tax Code.
You may have to pay with the net amount to make sure your Credit Note amount is the same as the balance in that customers account.

Once the Credit Notes are entered you then have to go to "Receive Payments" and apply the Credit Notes to the unpaid invoices.

Hope this Helps
Warren

[Vickidivoo]

Thanks for the advice, Warren. I haven't done as you suggested yet, but only because I have been busy with other stuff for the end of the financial year here. I will take your advice though, and see how I go. You might also have some advice for me for the query I have just posted about underpaying an employee. Thanks again for all your help.