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swaits b731d7ed04 feat(arap): a write-off on the timeline, and the CPA's note (P4b S7)

The viewer's invoice page already drew a WriteOff movement; now the
fixture proves it: a written-off invoice reads Written off, owes nothing,
and its timeline's "Written off" row opens the entry (the screenshot
invoice-written-off).

Needs attention gains the one item the tax rule asks for: a write-off
made this calendar year is listed, one per invoice, as "Write-off
awaiting the CPA's note", with what was written off, the day, and the
prompt that opens the document. Whether a debt is worthless, and in
which year, is a tax judgment that stays with the CPA (plan 8.3.16); the
books flag it and keep the evidence beside it until the year ends. The
item is computed in ledger-package's one attention function, so the
viewer and books.start see it alike; view_model.rs compares the two reads
on the same books.

The handbook's invoices-and-bills section starts here (S4.5 adds the
issue, terms and payment steps around it): step 4 says when to void, to
write off, or to reverse, and the recovery procedures D-49 records — the
same year, reverse the write-off and record the payment; a later year, a
plain entry to a bad-debt-recoveries revenue account, the invoice staying
written off (IRC §111).

Tests: a_write_off_shows_on_the_timeline,
a_write_off_is_flagged_for_the_cpa.

2026-10-27 12:44:45 -06:00

4.5 KiB

Raw Blame History

Invoices and bills

An invoice is money owed to you (Accounts Receivable, 1200); a bill is money you owe (Accounts Payable, 2000). Each is a document whose figures come from the ledger lines tagged with it: what is paid, discounted, written off and still owed is read from those lines, never kept beside them, so a reversal, a void or a bounced payment is right by construction. books.documents lists them, books.document shows one with its timeline, and books.control_check proves the control accounts equal their documents.

Step 4: void, write off, or reverse

One of these, and only one, fits what happened:

Void it (books.void_document) when the document should never have existed: a duplicate, the wrong customer or vendor, a test entry. It is reversed, keeps its id (and, once numbered, its number) and reads void; nothing is deleted. Refused while a payment stands on it: reverse that payment first, and the refusal names it. Use a void for a mistake, never for an invoice that was real.
Write it off (books.write_off_invoice) when the invoice was real and the work or goods went out, but the customer will not or cannot pay. That is a bad debt: the books post Dr Bad Debt Expense 6990 / Cr Accounts Receivable for what will not be collected, and what it owes falls from that day. The evidence of worthlessness — the collection letters, the bankruptcy or liquidation notice, the collection agency's report — is filed with the write-off in the same call (upload_id, or an existing_attachment_id already filed), because a bad debt is deducted on all the pertinent evidence (Treas. Reg. §1.166-2(a)). Write off all of it, or part of it with amount: a partial write-off is deductible to the extent charged off (Treas. Reg. §1.166-3(a)), and the rest stays owed and in the aging. The books must be on the accrual basis: a cash-basis company never counted the invoice as income, so there is no basis to deduct (IRC §166; Treas. Reg. §1.166-1(e)), and the tool refuses.
Reverse an entry (books.reverse_entry) when a posted entry is wrong: a payment against the wrong invoice, a wrong amount, a check that bounced, a write-off made too soon. Posted is forever: the correction is an opposite entry linked to the one it reverses, never an edit and never a delete. Reversing a payment puts the invoice back to owing what it did; reversing a write-off re-instates the debt.

A bill is never written off: a vendor releases you with a vendor credit or by voiding its own invoice, and until then you owe it (ASC 405-20-40-1). If a vendor's bill was wrong, ask for a corrected bill or record a credit when one is built; void it only when it should never have been entered.

Recovering a debt written off

The same tax year: reverse the write-off — books.reverse_entry on the write-off's entry. The invoice reopens, owing exactly what the write-off took off; then record the payment with books.receive_payment as usual. Nothing else is needed: within the year the deduction comes back out, and the payment is a payment.
A later tax year: do not reverse the write-off. Record a plain entry — books.draft_entry, books.add_line on each side, books.post_entry — debiting the deposit account and crediting a "Bad debt recoveries" revenue account (tax category other income), with a memo naming the invoice. The invoice stays written off, and the recovery is income in the year it arrives (IRC §111); the CPA sees it apart from the year's sales.

Neither procedure invents a new kind of movement on the document: the books record what happened, and the invoice's timeline shows the write-off (and, if it was reversed, that it no longer stands).

What the CPA will check

The agings tie to 1200 and 2000 at month and year end (they do by construction: the control check says so). Every write-off carries its reason and its evidence of collection efforts. Write-offs are not used in place of a credit memo for a valid invoice, and never to hide a mistake that a void would show. Whether a debt is worthless, and in which year, is a tax judgment that stays with the CPA: the books flag each write-off made this year in Needs attention, with the evidence beside it, until the year ends.

The evidence rule

Every entry needs its receipt ({evidence_rule}). A document the books post themselves — an invoice, a bill, a payment, a write-off — carries its own: the issued copy, the vendor's bill, the payment's reference, the evidence of worthlessness. A reversal needs none of its own: its original carries it.

4.5 KiB Raw Blame History