opening-balance

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

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.
Opening Balance Write Off account

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.
Record payment for the vendor's opening balance write-off

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.
Create a manual journal for opening balance write off
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