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Write off small customer and vendor balances

You may have small balances that are the result of an error, an overpayment, or an underpayment. Often it would cost more in time and materials to collect or pay the amount due than it would be to clear it from your accounts.
 
To remove the amounts follow one of the steps below:
  • Create a journal entry to apply to the overpayment:
  • Create an account and an item that you can use to record and track the small amounts you write off. You can adjust the dates of each transaction to occur in the appropriate fiscal year or period. 
Detailed Instructions
Create a General Journal Entry to write off the amount:
  • Create a General Journal Entry to write off an overpayment/underpayment in Accounts Receivable:
  1. From the Company menu , select Make General Journal Entries.
  2. In the Make General Journal Entries window, change the date if necessary.
  3. Fill in the entry number.
  4. Click in the Account field, select Accounts Receivable account from the drop-down list.
  5. Click in the (Debit for overpayment)(Credit for under payment) field and enter the amount.
  6. Tab to the Name column, select the Customers name from the drop-down list.
  7. In the next row in the Account field, select the off-setting account.
  8. Click in the (Credit for overpayment), (Debit for underpayment) field and enter the amount.
  9. Click Save & Close

 Apply the General Journal Entry to the Existing Credit/Debit:

  1. From the Customer menu, select Receive Payments.
  2. Click on Discounts And Credits located on the Main tab at the top.  (In QuickBooks 2012 and earlier, click on Discount & Credits at the bottom.)
  3. Click the Credit tab.
  4. Select the available Credit.
  5. Click Done.
  6. Click Save & Close
  • Create a General Journal Entry to write off an overpayment in Accounts Payable.
  1. From the Company menu, select Make General Journal Entries.
  2. In the Make General Journal Entries window, change the date if necessary.
  3. Fill in the entry number.
  4. Click in the Account field, select Accounts Payable from the drop-down list.
  5. Click in the Credit field and enter the amount.
  6. Tab to the name field and select the Vendor from the drop-down list.
  7. In the next row in the Account field, select the off-setting account.
  8. Click in the Debit field and enter the amount.
  9. Click Save & Close.
  •   Apply the General Journal Entry to the Existing Credit:
  1. From the Vendor menu, select Pay Bills.
  2. Click Set Credit.
  3. Select the available Credit.
  4. Click Done.
  5. Click Save & Close
 Create an account and an item to use when writing off small amounts (one-time setup):
  1. From the Lists menu, select Chart of Accounts.
  2. Click the Account button, select New:
  3. QuickBooks 2007 and later:
    • Select Income and then click Continue.
    • Enter Minor A/R and A/P Charge-Off in the Account Name field.
    • Click Save & Close.
  4. QuickBooks 2006 and earlier:
    • Select Income in the Type field.
    • Enter Minor A/R and A/P Charge-Off in the Account Name field.
    • Click OK.
  5. From the Lists menu, select Item List.
  6. Click the Item button, select New:
  7. Select Other Charge in the Type field.
  8. Enter Minor Charge-Off in the Item Name/Number field.
  9. Select Non-Taxable Sales in the Tax Code field.
  10. Select Minor A/R and A/P Charge-Off in the Account field.
  11. Click OK.
Select an option below that best fits the small amount you want to clear:
  • Customer underpayment in Accounts Receivable
  1. Select the Customers menu and select Receive Payments.
  2. Select the customer name in the Received From field.
  3. Select the invoice for which you want to write off an amount.
  4. Click the Discounts & Credits button.
  5. Click the Discount tab:
    • Enter the amount in the Amount of Discount field.
    • Select Minor A/R and A/P Charge-Off in the Discount Account field.
    • Click Done.
  6. Click Save & Close.
  • Customer overpayment in Accounts Receivable
  1. Select the Customers menu and select Create Invoices.
  2. Select the customer name in the Customer:Job field.
  3. Select Minor Charge-Off in the Item field. And enter the amount of the overpayment.
  4. Click the Apply Credits button.
  5. Select the credit in the Available Credits section of the Apply Credits window (which should match the amount of the invoice).
  6. Click Done.
  7. Click Save & Close.
  • Vendor underpayment in Accounts Payable
  1. Select the Vendors menu and select Pay Bills.
  2. Select the bill that contains the balance you are writing off.
  3. Click the Set Discount button:
  4. Click the Discount tab:
    • Enter the amount in the Amount of Discount field.
    • Select Minor A/R and A/P Charge-Off in the Discount Account field.
    • Click Done.
  5. Click Pay Selected Bills.
  6. Click Done in the Payment Summary window.
  • Vendor overpayment in Accounts Payable
    • Enter a bill to offset the credit:
  1. Select the Vendors menu and select Enter Bills.
  2. Select the vendor in the Vendor field.
  3. Click the Items tab.
  4. Select Minor Charge-Off in the Item field.
  5. Enter the amount of the write-off in the Amount field.
  6. Click Save & Close.
  • Pay the bill you just entered to use the available credit:
  1. From theVendors menu, select Pay Bills.
  2. Select the Bill you just entered.
  3. Click the Set Credits button.
  4. Click the Credits tab and select the credit.
  5. Click Save & Close.
  6. Click Pay Selected Bills.
  7. Click Done in the Payment Summary window.

 If this solution does not resolve the issue, please review other available QuickBooks support options for additional guidance. You can also read and post messages relating to your issue on the QuickBooks Community forums.

KB ID# HOW12940
4/25/2014 1:04:12 AM
PPRDQSSWS407 9102 Pro 2013 85b14a