Trabalance
Sales

Writing Off Bad Debt

When an invoice will never be collected, write it off. One entry moves the balance from Accounts Receivable into Bad Debt Expense — the sale stays on record, the receivable does not.

A sale that was made and never paid for is not a mistake to be voided. The revenue was real, the goods left, and the tax was reported. What is no longer real is the receivable — the expectation of cash. Writing off bad debt removes that expectation and records the loss where an accountant expects to find it.

Sales → Invoices → open the invoice → More → Write Off as Bad Debt.

The write-off dialog, the entry it posts, and how the invoice reads afterwards.

When it is available

Write Off as Bad Debt appears on Invoices (and Bills on the purchase side) when all of these hold:

ConditionDetail
The document is an InvoiceNo other sales type offers it — not a sales receipt, not a credit note, not an estimate.
There is a balance left to write offThe remaining balance must be greater than zero. A fully paid invoice is refused with "Document is fully paid — nothing to write off".
The document is not voidedA voided invoice is refused with "Cannot write off a voided document".
No approval is pendingThe action is withheld while an approval workflow has the document.
You hold delete permission on the featureThe same permission that allows voiding.
✅There is no age requirement

Trabalance does not require an invoice to be overdue before it can be written off. The action tests only that a balance remains. Whether an unpaid invoice has become a bad debt is a judgement your business makes, not one the software makes for you.

The dialog

Write off as bad debt? This will write off the outstanding balance of USD4,300.00 as bad debt expense. A journal entry will be created (Debit: Bad Debt Expense, Credit: Accounts Receivable).

There is one field — a free-text box placeheld "Reason for write-off (optional)". It is genuinely optional, but it is the only place the why is recorded, and it travels onto the journal line's description. Write something an auditor could read a year later: "customer entered liquidation", "disputed and abandoned", "below cost of collection".

⚠️The amount is the live balance, not the invoice total

The figure written off is recalculated at the moment you confirm — item total, less document discount, less cash discount, less every active payment. If a partial payment landed while the invoice was on screen, the write-off takes the smaller, correct number. This is deliberate: writing off a stale header figure would post the wrong loss.

What it posts

Writing off an unpaid invoice of 4,300.00
AccountDebitCreditDescription
Bad Debt Expense4,300.00—The loss, recognised as an expense in the period you write it off
Accounts Receivable—4,300.00The receivable is cleared — the customer no longer owes it

Revenue is not reversed. The sale happened; only the collectability changed. This is the difference between a write-off and a credit note, and it is the reason the two are separate actions.

If your chart of accounts has no Bad Debt Expense account, one is created for you the first time you write something off, with a properly allocated account code.

Afterwards

The invoice's status becomes Written off and its banner reads "This invoice was written off as bad debt" in a neutral tone — never in success green. That colour choice is deliberate: a written-off invoice is not a paid one, and an auditor should never mistake the two on a screen.

SurfaceWhat changes
The invoiceStatus Written off. Balance zero. Record Payment is withdrawn.
The customer's balanceFalls by the written-off amount — Accounts Receivable was credited.
Profit & LossBad Debt Expense rises by the same amount in the period of the write-off.
Aging reportsThe invoice leaves the open-item ladder; it no longer ages.
Sales revenueUnchanged. The sale is still a sale.

Doing it twice

Writing off the same invoice again is safe. If a write-off entry already exists for that document, the request returns success without posting a second one — so a network timeout followed by a re-click cannot double-post the loss.

If the customer eventually pays

The settlement rows a write-off creates cannot be detached from the receipt-allocation screen — the message reads "Write-off entries cannot be detached". Reversing a write-off is an accounting decision, not a link edit. Record the recovery as a separate transaction with your accountant's guidance rather than trying to unpick the original.

Write-off, void or credit note

You want to…UseEffect on revenue
Record that a real sale will not be collectedWrite Off as Bad DebtRevenue stays. An expense is recognised.
Withdraw a document that should never have existedVoidRevenue is removed with the journal.
Agree with the customer that they owe lessCredit noteRevenue and tax are reversed for the credited amount.
Return cash the customer already paidCustomer refundCash leaves; revenue is untouched.
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