Writing Off Invoices (Bad Debt)

When you’ve decided an invoice is never going to be paid — collections gave up, the customer went out of business, the amount is too small to chase — you write it off instead of deleting it.

What write-off does

• Marks the invoice as Written Off with a date and reason.
• Posts a write-off entry against the AR balance so the customer’s open balance goes to zero.
• Leaves the original invoice fully visible in history.
• Counts toward the Bad Debt line on the AR aging report and the P&L.

To write off an invoice

1. Open the invoice (from the customer’s AR detail page or the Invoices list).
2. Click Write Off.
3. Enter the amount (usually the full open balance) and a reason.
4. Confirm.

If the customer eventually pays

If a written-off invoice gets paid later — recovery happens — record a normal payment against it. The write-off automatically reverses for the recovered amount and the recovery shows up on the bad-debt-recovered line.

When to use vs. credit memo

• Write-off — you’re giving up on collecting; it’s bad debt.
• Store credit — you’re refunding or crediting because of a return, dispute, or goodwill gesture. The customer’s balance still shows the original sale, just offset by the credit.