Best Practices for Writing Off Bad Debt in QuickBooks
When customers fail to pay, writing off bad debt in QuickBooks ensures clean books. First, create a dedicated expense account. Then, record a journal entry that credits accounts receivable and debits the bad debt account. Keep documentation of each write-off for accounting accuracy and tax purposes. Tracking bad debt helps identify high-risk customers and informs future credit policies. QuickBooks allows you to generate reports to analyze trends, ensuring better financial decisions and minimizing losses over time.