How do I write of a vendor’s opening balance?

To write off a vendor’s opening balance, you’ll have to:

• Create an account
• Record payment for the opening balance
• Create a manual journal

Create an Account

You have to create an account through which you can track the written-off opening balance. Here’s how:

• Go to the Accountant module on the left sidebar and select Chart of Accounts.
• Click + New Account in the top right corner of the page.
• In the Create Account pop-up:
  • Enter a suitable Account Name, for example, Opening Balance Write Off.
  • Select Payment Clearing as the account type from the Account Type dropdown.
  • Enter the Account Code and provide a short Description for the account if required.
  • Click Save.

Record Payment for the Opening Balance

You have to record a payment to offset the vendor’s opening balance and account for the noncollectable debt. Here’s how:

• Go to the Purchases module on the left sidebar and select Payments Made.
• Click +New in the top right corner of the page.
• On the Record Payment page:
  • Select the vendor whose opening balance you want to write off from the Vendor Name dropdown.
  • Select Opening Balance Write Off from the Deposit To dropdown.
  • Enter the amount in the Vendor opening balance row in the Unpaid Bills section.
  • Enter the other necessary details and click Save.

Create a Manual Journal

You have to create a manual journal to pass of the opening balance write off as a bad debt. Here’s how:

• Go to the Accountant module on the left sidebar and choose Manual Journals.
• Click +New Journal in the top right corner of the page.
• On the New Journal page:
  • Select the account from which the amount is debited (Opening Balance Write Off) and the account to which the amount is credited (Bad Debt).
  • Select the vendor with whom you want to associate the journal entry.
  • Enter the Debit and Credit amount. Ensure that the debited amount equals the credited amount.
  • Click Save and Publish.