From the course: QuickBooks Online Tips and Tricks
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Write off bad debt
- [Instructor] If a customer doesn't pay what they owe you, you write that money off as bad debt. It becomes an expense to your company. Here's how you change customer accounts receivable into bad debt expense. First, we're going to start up at the top right, click the Settings icon, and then choose Account and Settings. Over on the left side, click Advanced, and then find the Automation section. You want to make sure that the setting automatically apply credits is turned off. If it's turned on, you just click it again to turn it off, then click Save, and at the bottom right, click Done. Next, we have to create an expense account for the bad debt. Over in the navigation bar, point at Accounting and then choose Chart of Accounts. On the Chart of Accounts screen, up at the top right click New. The account type is Expenses, and the detail type is already set up for you, so choose bad debts. The name is filled in with…
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