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QuickBooks Void Invoice from Previous Year or Another Year

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In this blog, we will explore of the topic of QuickBooks void invoice from previous year.

QuickBooks Desktop or Online users might need to void invoice from previous year. There can be different queries in this context. Perhaps, you only want to cancel an open invoice or maybe you want to delete it from your company file altogether. Moreover, you will want to keep your books and financial statements intact when you void invoice from previous year or another fiscal year. This is where bad debts come in.

In this blog, we will see how to void invoice from previous year in QB Desktop and QBO. We will also see how to claim an invoice as a bad debt and write it off. Alright then, let’s dive in.

The blog will guide you in voiding an invoice from the previous fiscal year or another. However, for faster assistance, we recommend you connect to a QB ProAdvisor. Dial 1(800) 580-5375

Difference Between Voiding and Deleting an Invoice

When you go ahead to void or delete an invoice, you must need to consider the difference first.

Deleting an invoice removes it permanently from the company file, and no history or details about the invoice will be available for later reference. You should delete an invoice when unless you need the data later.

Process of deleted/voided transaction through infographic

Voiding an invoice cancels the payment or the invoice. However, the invoice number and other information will continue to be available. Only the amount will change to zero. You void an invoice when you want to cancel a payment.

Why You Shouldn’t Void Invoice from Previous Year?

Voiding an invoice isn’t always advisable if the books have been reconciled or closed, as it might trigger discrepancies and affect the financial reports. Therefore, these are some things you must consider before you void an invoice in QuickBooks Desktop.

Remember, voiding or canceling an invoice in a previous or another fiscal year might affect the books and financial reports. Therefore, speak with your accountant before you take these steps

An alternative is writing off these invoices as bad debts. We will explain how to clear an invoice as bad debt in the later selections.

Voiding an Invoice in Another Fiscal Year – QB Desktop

Here is how you can void an invoice in QuickBooks Desktop in easy steps-

  • Tap on the Customers menu. Choose Customer Center.
  • Select the name of the customer and find the invoice.
  • Double-click on the transaction. This will open the transaction.
  • Click on the Delete drop-down box nearby Save.
  • Choose Void.
  • Finally, click on OK to confirm.

However, voiding invoices in this way will affect your financial statements. Thus it is not recommended to void an invoice from a closed period like another fiscal year.

How to Void Invoices from Previous Year Without Affecting Financial Statements

If you need to void a QuickBooks invoice from previous year, here is how you can do that without affecting the books. This step is for the QuickBooks Desktop users. If you use QuickBooks Online instead, scroll down.

  • Firstly, create a backup of the company file.
  • Note down the details like the customer’s name, items, and amounts on the invoice from the closed period.
  • Now, create a credit memo. Here is how you can create a credit memo:
    • Go to the Customers menu and tap on Create Credit Memos/Refunds.
    • Click on the Customer:Job drop-down menu and choose your customer.
    • Provide the items related to credit.
    • Tap on Save & Close.
  • Choose the same customer, items, and amounts in this credit memo that you took note of in the last step. Make sure that the date of the credit memo is in the current period.
  • Tap on Save & Close.
  • You will see the Available Credit window.
  • Now, tap on Apply to an invoice and select OK.
  • Choose the invoice from the closed period.
  • Tap on Done.
  • Check the financial statements, if necessary.

Void an Invoice in QuickBooks Mac in a Closed Period

Here is how you can void an invoice in QuickBooks Mac in a closed period. We will also guide you on how to make sure the invoice doesn’t show up in aged receivables.

All the dates in these entries will be of today.

  • Create a Credit Memo for the customer for the same items as in the invoice.
  • (Add notes for a paper trail of why voiding an open invoice in a closed period.)
  • Tap on Receive Payments for the customer and select Apply Existing Credits.
  • Leave the amount as zero dollars and unmark the checkboxes for Outstanding Invoices/Statement Charges.
  • Check the invoice you want to void that matches the credit memo you created in the first step.
  • Save payment, and the invoice will no longer show up in the A/R.

Strong Recommendation: QuickBooks Invoices Not Being Received by Customers! FIXED

How to Delete an Invoice in Another Year in QuickBooks Desktop

If you’d rather delete the invoice than void it, you can click on the Delete option instead of Void. This removes the invoice from the company file altogether. Follow these steps to delete an invoice from QuickBooks Desktop:

  • Tap on the Customers menu. Choose Customer Center.
  • Select the name of the customer and find the invoice.
  • Double-click on the transaction. This will open the transaction.
  • Click on the Delete drop-down box nearby Save.
  • Choose Delete.
  • Finally, click on OK to confirm.

Void Invoice from Previous Year in QuickBooks Online

Before you go ahead and void an invoice from the previous year, know that it will affect your closed books and financial statements. Therefore, it is recommended that you consult an accountant or speak to a QB ProAdvisor before voiding it.

Let us see how you can void invoices from the previous year in QB Online. Follow the steps below for the same:

  • Open QuickBooks and sign in
  • Tap on the Sales or Invoices section.
  • Now, find the invoice you want to cancel.
  • Click on the invoice and select Void. Now, the invoice will be marked as canceled.

Now, QuickBooks will update your accounts. This will reflect the cancellation on your financial records.

Handpick Post: QuickBooks Duplicate Invoice: Create, Correct, Resolve

A Better Alternative – Write Off Invoices as Bad Debt

We now know that if you void invoice from previous year, it will create discrepancies in books and reconciliation. Therefore, a better alternative is to write off the invoice as bad debt. This will help you clear the invoice.

Bad debts are the payments your customers owe to you, but you are sure that you cannot obtain them now.

Write Off Invoices as Bad Debt in QuickBooks Desktop

First, you will need to create an account for Bad Debt in the Chart of Accounts. Make sure you are choosing Expense as the account type. Let us guide you on how to make an expense account to track bad debts:

Make a Bad Debt Account

Here is how you can create a bad debt account in the Charts of Accounts

  • Tap on the Lists menu. Choose Chart of Accounts.
  • Tap on the Account menu followed by New.
  • Tap on Expense, then Continue.
  • Now, you need to enter an Account Name. You can name it as Bad Debt.
  • Finally, click on Save and Close.

Write off an Invoice as Bad Debt

Now, follow these steps to write off bad debt for an invoice:

  • Tap on the Customers tab, and click Receive payments.
  • Select the name of the customer here.
  • Enter zero dollars (0.00) in the Amount field.
  • Optionally, you can also enter a memo at the bottom of the window that you’re writing off bad debt. The memo will appear in the customer’s register and be printed on statements.
  • Tap on the Payment column for the invoice that you want to write off.
  • Click on the Discount Info option.
  • Now, fill in the amount of the bad debt in the Discount field.  In the Discount Account field, select the name of your bad debt expense account.
  • Tap on OK to record the bad debt.

Write Off Invoices as Bad Debt in QuickBooks Online

Here is how you can write off your invoices as bad debts and clear them off.

Make a Bad Debt Account

Here is how you can create a bad debt account in the Charts of Accounts

  • Tap on the Settings. Choose Chart of Accounts.
  • Tap on New.
  • Choose Expenses from the Account Type dropdown menu.
  • Choose Bad Debts from the Detail Type dropdown menu.
  • Write bad debts in the Name field,
  • Tap on Save and Close.

Create a bad debt item

If there is no non-inventory item as a placeholder for the bad debt, you will need to create it. It won’t be a real item and will be just used for balancing the accounting.

  • Tap on Settings. Choose Products & services.
  • At the upper right side of the window, you will see New. Click on it.
  • Choose Non-inventory.
  • Write Bad debts in the Name field.
  • Choose Bad Debts from the Income account dropdown menu.
  • Tap on Save and Close.

Create a credit memo for the bad debt

  • Tap on + New.
  • Choose a Credit memo.
  • Tap on the customer from the Customer dropdown menu.
  • Choose Bad Debts in the Product/Service section.
  • Provide the amount you want to write off in the Amount column.
  • Write bad debt in the message displayed on the statement box,
  • Tap on Save and Close.

Apply the credit memo to the invoice

  • Tap on + New.
  • Choose Receive Payment under Customers.
  • Pick the right customer from the Customer dropdown menu.
  • Choose the invoice from the Outstanding Transactions section.
  • choose the credit memo from the Credits section.
  • Tap on Save and Close.

The uncollectible receivable in the amount will now appear on your Profit and Loss report as a bad debt under the Bad Debts expense account.

Final Words

Hopefully, you were able to void invoice from previous year or write it off as bad debt. However, if you face an issue while following the steps above or run into a problem, we advise you to reach out to an expert. QuickBooks issues are often difficult to resolve without the required technical expertise.

A ProAdvisor will take care of the matter at hand and help you get it resolved right away. Dial 1(800) 580-5375 now.

Frequently Asked Questions

How long before an invoice is void in QuickBooks?

The duration until the invoice stays active and valid and doesn’t become void is outlined by the Limitation Act 1980. According to this, you, as a creditor, can pursue unpaid debt from a debtor for up to six years after providing the product or service.

Is it legal to void an invoice?

While you can change or void an invoice, you will need to do it in accordance with the law. This is because an invoice is a legally binding document.

Can you void an invoice in QuickBooks?

Yes, you can void an invoice in QuickBooks. This will cancel the payment associated with the invoice.

How do I void an invoice from a previous year in QuickBooks?

The method to void invoice from previous year is different for QuickBooks Desktop and Online. We have explored detailed steps on how to void invoice from another fiscal year in this blog. Therefore, scroll up to the section that best describes your query.

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