What is a write-off in accounts receivable?

A write-off is what happens when a business decides an invoice is not going to be collected and removes it from the accounts receivable ledger. The balance does not just disappear; it is booked as a bad-debt expense, which reduces income for the period in which the write-off is recorded. It is the accounting-side mirror of giving up on a balance.

Write-offs are a normal part of running any business that extends credit. The question is not whether you will ever write anything off, but how much, and from where. A small number of small write-offs distributed across a large customer base is usually just the cost of doing business. A large write-off from one customer, or a cluster of write-offs in the same aging bucket every quarter, is a process signal.

Write-offs are often avoidable in hindsight. An invoice that gets written off at 180 days was almost always reachable at 45 days, before the customer fully disengaged. That is the basic case for early, consistent follow-up: the cheapest way to reduce write-offs is not better agency choice at the end, it is better cadence at the start.