![]() ![]() The next time you think, “I will just journal entry that concern”, stop and ask yourself, “can I approach this challenge with other built-in records”? Why? I do this because it deepens our team’s understanding of the NetSuite platform, our accounting skills, and it illustrates we think in a more innovative manner. I often challenge our team members to avoid suggesting to our clients to use journal entries in any situation the client faces. In my NetSuite Systems Integration practice, I lead a team of professionals with both business, accounting, and technology backgrounds. We have now written off the receivable in a clean manner without using journal entries!Ĭlick the related images to see an example of the practice. In this case, we expect a Debit to Bad Debts expense and a Credit to Undeposited Funds. Confirm GL Impact: view the GL impact to confirm the accounting. ![]() The Bank Deposit record will now total to zero - meaning, we did not really deposit any funds in the bank account. Select your general ledger Bad Debt expense account. Use Other Deposits to Target Bad Debt Expense: using the Other Deposits tab, enter a negative value amount for the write-off.We effectively moved the bad debt problem to Undeposited Funds. The accounts receivable aging will look good. At this point, NetSuite will Debit Undeposited Funds and Credit AR. Select the “Bad Debt” payment you applied in the previous step. Accept a Bank Deposit to Apply Payments: pretend you are going to deposit the funds into the bank.Note, this technique is using the account clearing method which I often write about. This way, when you run a payment report, you will see the Bad Debt payment reference. For the check number, use something descriptive such as “Bad Debt March 7, 2020”. Accept a Payment to the Undeposited Funds Account: use a standard accept payment to the customer account using the Undeposited Funds account.Click the related images to get a picture of the practice: Using NetSuite’s Help document as inspiration, I developed an alternative. How to Write Off a NetSuite Accounts Receivable Balance without a Journal Entry NetSuite Mass Update with SuiteScript to Write Off Invoices.Learn the Pattern to Close or Write Off Outstanding Customer Balances.Learn the Pattern to Write Off NetSuite Customer Balances.Readers may want to reference these articles: Note, I have written about this topic before. The classic one related to receivables is the “-None-” customer with a zero balance on the aging report. In addition, as many NetSuite-based accountants have learned, writing a journal entry to NetSuite control accounts tends to make permanent information elements show on reports. Mainly because I found that I try to avoid using Journal Entries as a matter of practice the primary reason is that they make it harder to analyze the effects of sub-ledger activity without reading the journal entry memo. NetSuite’s Help document suggests that you write a journal entry to initiate the process. The unfortunate reality is that businesses that offer their customers payment terms may need to write off amounts due where management assesses the receivable is not going to be paid. Take care.This article is relevant if you want to write off a NetSuite-based customer receivable but you would like to avoid the use of journal entries. If you have any other concerns with business accounts or transactions, I'll be right here to help you out again. Please let me know if you have more questions regarding the process. See the Step 4 - Step 5 of this article for the detailed steps: Write off bad debt in QuickBooks Online. We can use the expense account we created to track the bad debt to close the customer's unpaid invoices. Select Bad debts on the Income account ▼ dropdown.Go to Gear icon and select Products and Services.Next, let’s create a non-inventory item to hold the bad debt. From the Detail Type ▼ dropdown, select Bad debts.From the Account Type ▼ dropdown, choose Expenses.At the upper right, select New to create a new account.Go to the Gear icon and select Chart of accounts.If you haven’t created a bad debt expense account, please follow the steps below: Since you’ve mentioned that the bad debts still pop up when you make a payment, you’ll want to review the process of recording them into the program. The accounts reflected in your journal rely on the account assigned when you create or add the product and services included on the invoice. Good day, I'll make sure you're able to keep your accounts updated and manage bad debts in QuickBooks Online (QBO) accordingly.
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