Over time, small balances can accumulate on customer accounts — a few dollars left on an invoice after a partial payment, a rounding difference, or a minor discrepancy that was never resolved. When a balance is too small to pursue and will not be collected, writing it off removes it from your open AR and records it correctly for accounting purposes.
Every write-off requires a reason code and creates a permanent record in the Adjustment History. This keeps your audit trail intact even after the balance is cleared.
Before You Start
Your organization may have a threshold that determines whether a write-off can be posted immediately or requires approval from a controller or manager. Small balances — typically under a set dollar amount — can usually be written off directly. Larger balances may go into a pending approval state. If you are unsure of your company's threshold, check with your administrator before proceeding.
Steps
1. Go to Adjustments. Click Adjustments in the left sidebar. You will land on the Open Balance Items tab.
2. Find the balance you want to write off. Review the list of open balances. The Aging column shows how long each balance has been outstanding — items aged over 90 days appear in red, items aged 61–90 days appear in amber. Sort by the Aging column to bring the oldest balances to the top.
📸 Screenshot suggestion: The Open Balance Items tab with the Aging column visible, showing red values for items over 90 days and amber for items 61–90 days. The sort arrow on the Aging column header indicates descending sort order.
3. Open the three-dot menu on the row. Click the ⋯ menu on the right side of the row for the balance you want to write off.
4. Select Resolve balance. Click Resolve balance. The Resolve Balance modal opens, showing the customer name, invoice number, and the exact residual amount.
📸 Screenshot suggestion: The Resolve Balance modal showing the summary header with customer name, invoice number, and residual balance amount, and the four resolution option cards below.
5. Select Write off this balance. Click the Write off this balance card. The Adjustment modal opens, pre-filled with the customer, the amount, and the Write-Off category already selected.
💡 Note: If the balance is under your organization's small-balance threshold, a note will appear confirming it will post immediately with reason code WO-302 (Small Balance). If it is above the threshold, the adjustment may be submitted for approval rather than posted directly.
6. Select a reason code. Choose the reason code that best describes why the balance is being written off:
WO-300 — Uncollectible (Aged 120+): Use for old balances on accounts that are no longer active or that have not paid in over 120 days
WO-301 — Bankruptcy: Use when the customer has filed for bankruptcy
WO-302 — Small Balance: Use for minor amounts that are not worth pursuing — rounding differences, small residuals after payment
⚠️ Warning: Select the reason code carefully. It will appear in the Adjustment History and may be used in financial reporting. Using the wrong code — for example, marking a small rounding error as a bankruptcy write-off — will misrepresent your records.
7. Add any comments. Use the Comments field to note anything relevant — the original invoice number, why the balance was left unpaid, or a reference to a customer conversation. This is for internal use only.
8. Save the adjustment. Click Save. The balance is cleared from the Open Balance Items list, and the write-off is recorded in Adjustment History with the date, amount, reason code, and the user who posted it.
After Writing Off
Go to the Adjustment History tab to confirm the write-off appears correctly. The invoice will no longer appear in Open Balance Items. If the write-off requires approval and was submitted rather than posted directly, it will appear in Adjustment History with a Pending status until a manager approves it.