Accounting for Uncollectible Accounts Receivable (as an Expense)

When writing off an Accounts Receivable balance that will not be collcted, there is an option to treat the written off amount as an expense. To set this up in Brief Accounting:

 

Create New Expense GL Account:

See link below for creating a new GL Account:

Creating a New General Ledger Account

 

The account must be a 6000 series GL account similar to below:

Screen_shot_2013-03-20_at_10.21.53_AM.png

Set the above as the Bad Debts control account in Brief Accounting:

Company module GL SetUp tab.

Enter the Bad Debts GL and click Accept:

Screen_shot_2013-03-20_at_10.24.15_AM.png

When creating the new Credit Memo, instead of entering a 4000 series revenue GL Account, use the 6000 series account created above:

Screen_shot_2013-03-20_at_10.29.30_AM.png 

 

Note: The following warning will appear, which you can click OK to:

Screen_shot_2013-03-20_at_10.28.40_AM.png

Once this is setup, all bad debts can be tracked using the expense general ledger account.

 

 

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