Inactive Records
Setting a record to be inactive removes it from transaction windows, hence avoiding clutter. You can choose to omit inactive records on most reports. Inactive accounts still appear on the balance sheet, trial balance, income statement
Any record can be inactive: accounts, vendors,
customers, employees, inventory and service items, and projects
For example, a customer may owe you money, but has not paid for several years. You can remove the customer from lists in transaction windows to ensure that you do not sell them more items, but keep the record for the sake of reports.
Note: Do not make a terminated employee's record inactive until all outstanding transactions are completed.