Writing Off a Bill
Clear a payable you will never settle — and why, on a bill, the credit is income.
Sometimes a payable will never be paid: the vendor ceased trading, the balance is a residue too small to chase, or a dispute was settled by agreement that nothing more is owed. A write-off clears that remaining balance while leaving the bill itself intact.
Navigate to: the bill's detail page → More → Write Off as Bad Debt.
A Write-Off Is Not a Void
This is the distinction that matters, and Trabalance holds it strictly.
| Void | Write-off | |
|---|---|---|
| What it asserts | This document should never have existed. | The obligation was real, and it will not be settled. |
| The original journal | Retired. Cost and payable both reverse. | Untouched. The cost stays recognised in its period. |
| The document | Status becomes Voided. | Survives with its status and history. |
| New journal posted | None — the original is reversed. | Yes — one entry clearing the remaining balance. |
Writing off preserves the truth of your books: you did incur the cost, in the period you incurred it. Only the settlement changed.
The Journal
| Account | Debit | Credit | Description |
|---|---|---|---|
| Accounts Payable | 951.60 | — | The creditor is derecognised. Carries the vendor, so the party balance moves. |
| Other Income | — | 951.60 | A gain — releasing a liability without paying for it |
Releasing a financial liability without transferring consideration is a gain, not a reduction in cost. Routing it through an expense account would understate both expenses and income for the period. This is the one place where the purchase side and the sales side genuinely differ: writing off an unpaid invoice is a bad debt expense; writing off an unpaid bill is other income.
The vendor is carried on the Accounts Payable line only. That is the line the party balance engines read — putting it on both would count the vendor's position twice.
When the Action Is Available
| Condition | Detail |
|---|---|
| The document is a bill or an invoice | Write-off is offered on these two types only. |
| A balance is outstanding | The remaining balance must be greater than zero. A fully paid bill has nothing to write off. |
| The bill is not voided | A voided document has no live obligation. |
| It is not awaiting approval | Blocked while approval is pending or in progress. |
| You hold delete permission | Write-off is gated on the same permission as deleting, not on update — it is a destructive act on a balance. |
What Happens Afterwards
- The bill's balance falls to zero and its status becomes Paid — settled, though not by cash.
- The vendor's payable balance and AP aging drop by the written-off amount.
- Other Income rises, so the write-off shows in the period's profit.
- The write-off journal appears on the bill's Journal entries panel alongside the original posting.
A write-off is a management decision that a debt is extinguished, and it moves your reported income. It is not a tidying tool for a balance that is merely old, nor a substitute for a debit note when the vendor has agreed a reduction — for an agreed reduction, raise a debit note, which credits the cost back rather than recognising income.
Related
- The right instrument for an agreed reduction: Debit notes.
- Reversing a document that should not exist at all: Editing and voiding a bill.
- Where the cleared balance was showing: Vendor detail & aging.