This "reduction" in the fee that is billed out is not a reduction of income unless you use the accrual basis bookkeeping and report the gross total of fees billed ... only then can you reduce that amount by the amount not paid to get to the actual amount of income taken in. Most business use the cash method of accounting where you only report what actually came in not what was billed out. Either method is allowed but you must choose one and stick with it ... if you want to change methods a miserable form 3115 must be filed and the IRS must agree to let you change. I highly recommend you seek local professional help in getting your books set up correctly to start with and be educated on the rules if you do not know how to do so yourself.
