What is a write-off?
A write-off removes an uncollectible amount from your books — acknowledging the loss formally instead of carrying phantom revenue. For taxes, bad-debt write-offs are generally deductible as business losses. Write it off, learn the lesson (deposits! credit checks!), and move on.
In practice
The $4,200 bad debt is written off: accounts receivable drops $4,200, and the loss is recorded as a bad-debt expense for the year.
Clean books, clean mind
Numbered invoices and clear records make write-offs straightforward at tax time.
Create an invoice — freeFrequently asked questions
When should I write off a bad debt?
When collection is no longer realistic — after dunning and any collections attempt. Don't carry dead receivables into a new year.
Does a write-off mean I stop trying to collect?
Not necessarily — you can write it off for accounting purposes and still pursue it. But be honest with yourself about the odds.
Write-off vs. credit note?
A credit note reduces what a customer owes by agreement (a correction); a write-off acknowledges you'll never collect. Different documents, different situations.