CASH-BASED Companies: Handling "Bad Debt"

Question

I have a question for other companies set up with cash-based accounting, regarding how to handle old unpaid invoices.

Since we cannot write off bad debt as accrual-based companies can, how do you process it? I want to clear these unpaid balances out of our Jobber & Quickbooks open invoice reports (since they are so old and were sent to collections), but I still want to be able to see if a previous customer did not pay his/her bill. If I use the "Bad Debt" line item (that I think was a default in Jobber) it shows up as an expense on our P&L, which is not correct.

jjruedas · Answer

TAG the customer with something like "bad customer", "blacklist", "no service", etc. With that you can filter out the bad apples when doing reports or integrations to other apps.&nbsp;

judithvirag · Answer

You have to enter a credit note that you code to Bad Debt and match to the invoice in QB.&nbsp; This will clear it off.&nbsp;

bedellmgmt · Answer

In quickbooks you'll want to create a credit memo for the transaction amount, and then match them utilizing receive payments to zero out their balance.&nbsp; I'm curious if anyone else has any ideas how to note they are a "bad" customer??

jl · Answer

If you do a credit memo in Quickbooks, how do you clear out the invoice balance from reports in Jobber as well since invoices do not sync back that way? For example, right now I check our Jobber "Aged Receivables" report daily to see who is past due, but all the old customers in collections still show there as well.

bedellmgmt · Answer

JLthe folks at Jobber Support can walk you through the best way to do this

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CASH-BASED Companies: Handling "Bad Debt"

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