To zero out the open invoices, it's important to mark them as bad debt and write them off. Allow me to walk you through the process of writing off bad debt in QuickBooks Online (QBO), @customer.
First, you'll need to Create a bad debts expense account.
- Navigate to Settings and choose Chart of accounts.
- In the top-right corner, click New to add a new account.
- In the Account Type dropdown, select Expenses.
- Choose Bad debts from the Detail Type dropdown.
- Type “Bad debts” in the Name field.
- Click Save and Close.
Then create a bad debt item, here's how:
- Access Settings and choose Products & services.
- Click New at the top-right, then select Non-inventory.
- Enter “Bad debts” in the Name field.
- Select the Bad debts option from the Income account dropdown.
- Click Save and Close.
After that, you'll need to create a credit memo for the bad debt.
- Click on + New.
- Choose Credit memo.
- Use the Customer ▼ dropdown to select the customer.
- In the Product/Service line, pick Bad debts.
- Enter the amount you wish to write off in the Amount column.
- In the Message displayed on statement field, type in "Bad Debt."
- Click Save and Close.
Then you'll need to apply the credit memo to the invoice. Here's how:
- Click on + New again.
- Under the Customers option, choose Receive payment.
- Use the Customer ▼ dropdown to select the relevant customer.
- In the Outstanding Transactions section, locate and select the invoice.
- In the Credits section, choose the previously created credit memo.
- Click Save and Close.
For more detailed steps on writing off bad debt in QBO, you can refer to this article: Write off bad debt in QuickBooks Online.
Moreover, regarding to concern about clearing the outstanding balance without increasing the revenue, please be reminded that you'll need to consult an accountant to ensure that everything is properly recorded and that the revenue remains unaffected.
Additionally, you can get more hints while running your financial reports in our system, from these links:
If you have further questions about clearing old invoices, you can comment below, and we'll respond to you as soon as possible.
