---
title: "Write-off: definition | Rex glossary"
description: "Removing an invoice balance from accounts receivable because it won't be collected, charging it to bad debt expense or the allowance for doubtful accounts."
canonical: https://www.rex.inc/glossary/write-off
---

# Write-off

Removing an invoice balance from accounts receivable because it won't be collected, charging it to bad debt expense or the allowance for doubtful accounts.

Write-offs happen when collection is no longer realistic: the customer has gone out of business, pursuing a small balance would cost more than it's worth, or a deduction was accepted without a credit memo.

Small-balance write-offs deserve attention because they add up. A policy with clear thresholds and approvals keeps them a deliberate decision rather than the default for anything nobody had time to chase.

## Related terms

- [Bad debt expense The cost of receivables a business doesn't expect to collect, recognized as an expense on the income statement.](https://www.rex.inc/resources/glossary/bad-debt-expense)
- [Allowance for doubtful accounts A reserve for the share of receivables a business estimates it won't collect, shown as a reduction of the receivables balance.](https://www.rex.inc/resources/glossary/allowance-for-doubtful-accounts)
- [Bad debt recovery Collecting payment on an account that was previously written off as uncollectible.](https://www.rex.inc/resources/glossary/bad-debt-recovery)
- [Short payment When a customer pays less than the full invoice amount, leaving a balance that needs to be explained, accepted or collected.](https://www.rex.inc/resources/glossary/what-is-a-short-payment)

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