Write Off

Write Off is the ledger for small balances that will never be collected or paid and are cleared to tidy the books: a customer who paid Rs 36,000 against a Rs 36,160 invoice and will not send the rest, or a supplier balance of a few rupees left by rounding. A Payment Entry can write off the remaining balance through its Deductions table, and the Company's Write Off Account is set to this ledger so the amount lands here. Larger bad debts should go through Impairment Losses with proper review, since the IRD wants evidence of recovery efforts. Writing off a customer's balance does not reverse the VAT already paid on the invoice; only a credit note does that.

Write Off = Invoice balance - Amount actually received or paid when the difference is abandoned

1. 01Go to Accounts Setup > Company and confirm Write Off Account is set to Write Off.
2. 02Open the Payment Entry for the customer's receipt under Payments > Payment Entry.
3. 03In the Deductions or Loss table add a row with Write Off and the Rs 160 shortfall.
4. 04Submit. The entry below posts alongside the receipt and the invoice shows as Paid.
5. 05For a balance already received earlier, post Invoicing > Journal Entry with the same lines against the customer.

Set as the write-off account on Payment Entry or Sales Invoice when closing a small unpaid remainder. Use Journal Entry for larger bad debts.

Dr Write Off Rs 160, Cr Debtors Rs 160 to close Jivan Dahal's invoice if he had paid only Rs 36,000.