Writing Off AP balances

This FAQ will go over how to write off AP balances using a journal entries.

Start by creating a journal entry. The first line on journal entry will be to the AP account, with the Vendor on the purchase invoice selected in the “Name” column and the debit column set to the balance to write off. The second line is the offsetting account, and typically is set to the “Discounts Taken” account (the same account as terms discounts on purchases posts to). Make sure that the “correcting entry” box for both lines is not checked.

Post the journal entry, then make a payable to apply the purchase invoice and the newly created journal entry balance together (net $0 payment) and post it.