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

 
 
rf
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      08-20-2006, 07:56 PM
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.


 
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Joanne
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      08-20-2006, 10:29 PM

"rf" <(E-Mail Removed)> wrote in message
news:383Gg.52180$(E-Mail Removed)...
> 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


 
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