Writing off a finance charge leaves client with credit in A/R

Discussion in 'Quickbooks' started by rf, Aug 20, 2006.

  1. rf

    rf Guest

    I'm using QuickBooks Pro 2006, and I wanted to write off a finance charge.

    I followed the help by creating a credit for the client, with the item
    selected as "Bad Debt - Interest Charges". When I save this, it removes the
    balance on his account as viewed when doing a "Customer:Job List". And it
    shows up in the "Bad Debt - Other Expenses" on the "Financial Report".

    The next step, according to the help wizard, is to receive a payment from
    the client. and use the "set credits" button. When I do this, it gives the
    client a credit in his A/R.

    It is my understand that step two should only be clearing the "bad debt"
    from the A/R.

    Two questions:
    1. Shouldn't my client's balance reflect as zero in the A/R ??
    2. Shouldn't there be a way to reduce income in the "Finance Charges"
    account?

    I could just delete the F/C invoice, but I would like to track revenue lost
    as a result of some clients not paying their finance charges.

    If I sound confused, it's because I am. It seems like this should be a
    simple process. Perhaps I'm viewing it incorrectly.
     
    rf, Aug 20, 2006
    #1
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  2. rf

    Joanne Guest

    "rf" <> wrote in message
    news:383Gg.52180$...
    > I'm using QuickBooks Pro 2006, and I wanted to write off a finance charge.
    >
    > I followed the help by creating a credit for the client, with the item
    > selected as "Bad Debt - Interest Charges". When I save this, it removes
    > the balance on his account as viewed when doing a "Customer:Job List".
    > And it shows up in the "Bad Debt - Other Expenses" on the "Financial
    > Report".
    >
    > The next step, according to the help wizard, is to receive a payment from
    > the client. and use the "set credits" button. When I do this, it gives
    > the client a credit in his A/R.
    >
    > It is my understand that step two should only be clearing the "bad debt"
    > from the A/R.
    >
    > Two questions:
    > 1. Shouldn't my client's balance reflect as zero in the A/R ??
    > 2. Shouldn't there be a way to reduce income in the "Finance Charges"
    > account?
    >
    > I could just delete the F/C invoice, but I would like to track revenue
    > lost as a result of some clients not paying their finance charges.
    >
    > If I sound confused, it's because I am. It seems like this should be a
    > simple process. Perhaps I'm viewing it incorrectly.


    The purpose of "Receive Payment" is to apply the existing credit to the
    customer account balance. This way, nothing shows up on various reports
    (i.e.. "Open Invoice", "A/R Summary"). You are not really receiving a
    payment and put no value in the amount received box. In QB 2006, you
    highlight the open invoice and then set the credit. No $ are added to
    "Undeposited Funds" nor the "Bank/Cash" account.

    I hope I've understood your question and this is helpful.

    --
    Sincerely,
    Joanne

    If it's right for you, then it's right, . . . . . for you!!!

    http://www.jobird.com
     
    Joanne, Aug 20, 2006
    #2
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