At the end of your fiscal year, follow these steps to track your bad debt
so you can then write it off.
Click the Customize Report button at the top of the report.
In the Modify Report window, make sure both the From and To dates are the last day of your year.
Review the report to ensure that everything looks accurate.
The A/R Aging Detail report shows you invoices from customers that were still outstanding as of the last day of your year.
You can QuickZoom (double-click) on any
invoice in the report to go to the original transaction.
Fix any duplicate invoices or any mistakes.
For example, if you find two
invoices listed for exactly the same amount and upon examination discover that
you've entered two invoices by mistake, delete the second
invoice—don't write if off as bad debt. Only write off invoices that
are truly bad debt or items the customer refused or is unable to pay.
If customer payments are showing up on this report, there is an error somewhere that you need to solve that problem before writing off bad debt.
The error is generally because the payment didn't get applied to an invoice. This would
be the case if you see both a customer invoice and the customer payment listed
on the report. To fix or clear both the payment and invoice from the report, double-click the customer payment listed on the report. When the Customer Payment window appears, find the "Invoices paid (with this payment) and those still outstanding" area and add a checkmark by the
invoice this payment should be applied to.
If a customer payment is listed on the A/R Aging Detail Report and no
invoices appear for that customer, you need to figure out why you received
money from that customer and didn't enter an invoice first. You should
enter an invoice for the customer and apply the payment to the invoice before
If your A/R Aging Detail report is clean, write
off bad debt
A clean A/R Aging Detail report shows a list of only what is
or was outstanding at the end of your year.
Handling bad debt