How to set up my collection book keeping system in QB.

I have also had to send a few customers to collections. What I did was create a separate Accounts Receivable account which I call Legal. You can call yours collections or something.

I went into every outstanding invoice and moved them from the regular A/R account to my new Legal A/R.

That took the total out of my regular A/R account. Now when I look at my A/R reports I see a realistic amount...not one inflated by "bad debt."

Now you just sit back and wait for the collections company to collect the money.

The collections company becomes one of your vendors. You will pay the collections company in the same way that you would a regular company - assuming that they send you a bill.

This will explain the first part - out to separate out your debtors. That would be your first step.

Thank for your answer

I did everything you recommended. But, I have another question.

The Collection Company sent us an statement / invoice and a check.

Where they details the following:

1. The amount collected for each debtor or customers in account receivable.

2. Example:

Statement/Invoice for: Company Name

Date - Debtor - % - Amount paid agency - Amount paid you - Due us - Due you

Information

===============================================================

5/18/09 El Sol 50% 67.36 33.68

The question: How can I set up the amount that corresponds to the company and the check that it is for us?.