---
title: "The old balance that is never coming back"
source: https://www.lskhata.com/blog/old-balance-that-is-not-coming-back
category: "Running a shop"
language: en
published: 2026-08-16
reading_time: 7 min
---

# The old balance that is never coming back

_What to do with a four-year-old debt: how to tell the difference between slow and gone, and why leaving it on the books costs you twice._

## In short
- Sort by age, not by size. A small four-year-old balance is a different problem from a large four-week-old one.
- Ask one question: has anything at all happened on this account in a year? If not, it is not slow, it is finished.
- Leaving dead balances on the books inflates your outstanding figure and makes the live list harder to work.
- Closing a balance in your records is a bookkeeping decision with tax consequences. Ask your accountant how to record it.

Every shop that has given credit for more than a couple of years is carrying some money that is not coming back. This is not a failure of management; it is the cost of doing business on trust in a place where trust is how business is done. The failure, if there is one, is leaving those balances sitting in the live list where they quietly distort everything.

_[Figure: The two bars on the left are money you can still act on. The two on the right are a decision you have been postponing.]_

### Sort by age, not by size

The instinct is to work the largest balances first. It is the wrong order. A large balance from last week belongs to somebody who is still trading with you and will probably pay. A small balance from three years ago belongs to somebody you have not seen since, and no amount of effort changes that.

Ageing your dues — grouping them by how long they have been outstanding rather than by amount — is the view a paper bahi cannot give you and the one that tells you where your morning is worth spending. It is also the view that makes the dead balances visible as a group rather than scattered through the list.

### One question separates slow from finished

Has anything happened on this account in the last year? Not "have they paid" — anything. A purchase, a part payment, a reply to a message, a conversation in the street.

| What you see | What it probably is | What to do |
| --- | --- | --- |
| Still buying, balance creeping up | A limit problem, not a collection problem | Set a limit and a period. Serve them, and stop the growth. |
| Not buying, but answers messages | Slow, and recoverable | Agree a date and a part payment. Write the date down where you both can see it. |
| No purchases, no replies, a year or more | Finished, in practice | One final message. Then close it in your books and stop carrying it in the live list. |
| Business closed or person moved away | Finished | Close it. Chasing costs you time you could spend on the top two rows. |

### What leaving them on the books actually costs

It costs you twice, and both are easy to miss.

- Your outstanding figure is wrong, in the optimistic direction. If ₹60,000 of a ₹200,000 outstanding total is four years old, then the money you can realistically expect is ₹140,000, and every plan you make on the larger number is a plan on money that does not exist.
- Your live list is harder to work. The dues screen you look at each week is padded with names nothing will ever happen to, and after a while you stop scanning it properly — which means the genuinely recoverable ones stop getting attention too.

**Closing a balance is not deleting a customer.** Keep the record. The customer, the transactions and the dates should all remain — what changes is that the balance stops counting as expected money. If that person walks back in next year, and some do, you want the history there, not a blank.

**How to record it is an accounting question.** Whether a written-off debt reduces your taxable income, what evidence you need, and how it should appear in your books depends on your country, your registration and how you keep accounts. Khata will let you record the decision and keep the trail. It will not tell you the correct tax treatment, and neither will this article — ask your accountant once and apply the same treatment consistently.

> The balance stopped being money a long time ago. Today you are only deciding whether to stop counting it.

## Common questions

**How do I know when a customer's debt is not coming back?**

The most reliable signal is not the age of the balance but the absence of contact. Somebody who still buys from you, or still answers, is slow. Somebody who has not transacted, not replied and not been seen for a year is a different category, and treating the two the same wastes your effort on the one you cannot recover.

**Should I delete an old unpaid balance?**

Do not delete it. Deleting removes the evidence that the sale happened at all, which is the opposite of what you want if it ever comes up. Record it as written off or closed so that the history stays intact and your live outstanding figure stops including it.

**Does writing off a bad debt affect my tax?**

It can, and the rules differ by country, by how you keep your books and by whether you are registered. This is genuinely a question for your accountant — the right answer for a shop in India may not be the right answer for one in Nepal, and it changes. What we can say is to keep the record rather than erasing it, because the record is what any treatment depends on.

**Is it worth chasing a very old small balance?**

Usually not with your own time. The cost of an afternoon spent on a two-thousand-rupee balance from three years ago is almost always higher than the balance, and that afternoon spent on your 0–30 day list would recover more. Send one final message, then close it.