Facing problems managing your client’s balance sheet due to unpaid invoices? Here’s how you can use QuickBooks Accountant to write off the invoices effortlessly

Being an accountant demands precision as your clients rely on you for financial management, which leaves no room for even minor errors. Unpaid invoices and bad debts are sure to aggravate you when tallying the balance sheets of your clients. If the unpaid invoices aren’t written off and financial records aren’t in order until the end of the fiscal year, it could lead to irregularities in the legal documents used for tax filing.

QuickBooks Accountant Tools: Write Off invoices is a great way to get rid of any unpaid invoices and bad debts from the client’s account. Available in both QuickBooks Accountant and QuickBooks Enterprise Solutions, this dedicated tool helps you write off multiple invoices simultaneously. This blog in-detail talks about the correct procedure for writing off unpaid invoices in QuickBooks. Read on to get familiar with the Write Off Tool in QuickBooks and learn to use it effectively for maximum accuracy in your client’s account.

Prerequisites Before you Write Off an Invoice in QuickBooks Desktop

Writing Off invoices in QuickBooks Desktop is a simple task that can be done with just a few clicks. However, there are some things you need to check before using the QuickBooks Write Off Tool to avoid discrepancies in your client’s net income or Profit & Loss reports. Pay attention to the following before writing off invoices in QuickBooks:

Create an Accounts Receivable Aging Detail Report:

Start by creating an A/R Aging Detail Report in QuickBooks, which helps you identify the date on which the amount was to be received but still pending. Here’s how:

• Launch your QuickBooks Desktop and go to the Reports menu.
• Select the Customers & Receivables option and tap A/R Aging Detail.
  
• Wait until the report is created and use it to identify all the due balances.

Verify that the pending amounts are uncollectible:

Before writing off an invoice in QuickBooks, you must ensure that it is totally uncollectible, and your client is sure that they won’t receive the payment. Double-check the pending amounts and go through all the conditions brought forward by the customer for not paying the amount. If there are any chances of receiving the payment, you should wait before writing off the invoice.

Backup your data:

Having a QuickBooks restore point to recover your data is always a good option before writing off invoices. If anything goes wrong, and you need to undo a write-off, you can simply restore the data back and then start again.

Validate system permissions:

Talking about QuickBooks, you must have admin privileges to avoid any restrictions due to insufficient permissions. Specially if you have a multi-user setup, make sure you are signed in as an admin user, and you have permissions to access the system files, internet, and other system resources.

Consultation with client:

Before you write off an invoice in QB Desktop, we’ll advise you to consult your client if there are any payment plans or negotiations underway. You should write off the invoice only after your client confirms that the A/R has turned into a bad debt.

Once you are done with all the above things, let’s straightaway get to the proper method of writing off invoices in QuickBooks Desktop.

Reliable Method to Write Off a Group of Invoices in QuickBooks

As we discussed earlier, QuickBooks Accountant Write Off Tool allows writing off multiple invoices at once. The accounting software also creates a credit memo for all the invoices you write off, and also adds a memo about the write-off to both the invoice and credit memo. Follow the procedure mentioned below:

Step 1: Set Up the Write Off Item

Use the following instructions to select all the items you want to write off using QuickBooks Desktop:

1. Access the Write Off Item drop-down arrow and click Add New.
2. Set the Type to Other Charge in the New Item Window and type a name such as ‘write off invoices’ in the Item Name/Number Field.
3. Ensure the Amount or % field is set to zero and set the Tax Code field to Tax.
4. Click the Account ▼ drop-down arrow and select the bad debt expense account.
5. Tap OK.

Step 2: Utilize QuickBooks Write Off Invoices Tool

Use the following instructions to run the Write Off Invoices Tool in QuickBooks:

1. Launch your QB Desktop and go to the Accountant menu.
2. Hover over the Client Data Review option in the drop-down and click Write Off Invoices.
3. Set criteria to write off the invoices and use the fields at the top to filter open invoices.
4. Select all the invoices you want to write off in the checkmark column and select the write off item from the bottom of the window.
5. Modify the Write Off Date if required, and go to the Class drop-down menu to select the correct class if you track classes.
6. Tap Preview & Write Off to see all the invoices you are writing off, and cancel the process if you find any errors.
7. Click Write Off when you get ready after the review.

All the invoices related to bad debts or unpaid amounts will be written off automatically once the steps given above are applied.

Conclusion

This blog is all about Quickbooks Accountant tools: Write Off invoices, a brilliant feature designed for accountants looking to maintain accurate financial records of their clients. The correct procedure to use the QuickBooks Write Off Tool is defined in the blog, along with some factors to consider before using the tool. We hope the blog provides all the information you are seeking about the Write Off Tool in QuickBooks and helps you ensure financial clarity for your clients.

FAQs

Can I write off multiple invoices at once in QuickBooks? 

Yes, you can easily write off multiple invoices simultaneously using QuickBooks Desktop. The QuickBooks Account Write Off Tool serves as a great option for clearing out all the bad debt from your client’s accounts.

What happens to the payment history when I write off an invoice?

The payment history will exist even after you write off an invoice from a customer’s record. The payment history will have info on any partial payments, attempts to collect a payment, including other transaction history that happened between the client & customer.

How do I reverse a write-off in QuickBooks?

You can apply the customer’s new payment to an invoice only after deleting the bad debt from their record. Apply the following steps to undo a write off in QuickBooks Desktop:

Step 1: Perform a special reconciliation to fix transactions in the bank account

 As a business owner, you’ll have to reconcile your QB accounts to begin the adjustments. Here’s how:

• Access the Banking menu and select Reconcile.
• Choose the bank account where you want to reconcile the transactions.
• Choose a date for ‘off cycle’ reconciliation in the Date of Statement field.
• Type in the balance of the most recent reconciliation and tap Continue.
• Review the transactions in the Reconcile window and ensure the Difference Field displays $0.00.
• Tap Reconcile Now when ready.

Step 2: Delete the bad debt

Once the reconciliation is done, apply these steps:

• Access the Customers menu and select Customer Center.
• Choose the customer and find the bad debt transaction projected as ‘discount.’
• Open the bad debt with a double click and click the Delete icon at the top.
• Select Save & Close.

Step 3: Review the reconciliation report

After finishing the reconciliation, you can generate a reconciliation report to ensure the bad debt has been cleared. Here’s how:

• Access QB’s Reports menu and select Reports Center.
• Search and open the Previous Reconciliation report.
• Select the account you reconciled and choose from Detail, Summary or both.

How do I track written-off invoices in QuickBooks?

You can create a Profit and Loss report, Customer Balance Detail report or Account Recievable Aging report to check all the invoices written off from the customer records. All of the above-mentioned reports can be created from the Reports menu of your QuickBooks Desktop.