To write off bad debt in QuickBooks, start by creating an expense account for your business’s bad debts. After creating your ‘bad debts’ expense account, create a non-inventory item to act as a placeholder for bad debts. Credit the bad debt item to your ‘bad debts’ expense account by creating a credit memo for the amount you want to write off. After applying the credit memo to the correct customer invoice (ie. the customer who the bad debt came from), the debt should be recorded on your QuickBooks Profit and Loss statement as a bad debt.