Setup
- On the Bad Debts Reserve Setup page, fill in the following fields:
| Field name | Description |
|---|---|
| Reserves for Bad Debts Nos. | Specifies the code of the number series that will be used to assign numbers to unaccounted bad debt reserves. |
| Posted Reserves for Bad Debts Nos. | Specifies the number series code used to assign numbers to posted reserves for bad debts. This field is required for posting. |
| Date Analysis Type | Date Analysis Type = Posting Date Document, the quantity of days of Bad Debts must be calculated from the posting date. Date Analysis Type = Due Date Document, the quantity of days of Bad Debts must be calculated from the Due Date of the document. |
| Reserve Posting Type | Specifies the type of posting for bad debt reserves. |
| Application of Red Reversal Method | Specifies whether the red reversal method is used when previously accrued reserves are decreased. |
| Reversal Period Formula | Specifies the formula for the date of reversal of provisions for uncollectible receivables. |
| Post detailed operations of the Reserve | Specifies the detail required for accounting for bad debt reserves. |
| Gen. Journal Template Name | Specifies the general journal template that the system uses when posting the reserve. This field is required. |
| Gen. Journal Batch Name | Specifies the batch of the selected general journal template that the system uses when posting the reserve. This field is required. |
Related number series configured on the No. Series page for the series specified in Reserves for Bad Debts Nos. are available for selection in the document.
When a new company is initialized, the system automatically creates the BDRESERVES source code and assigns it to Bad Debt Reserve Document on the Source Code Setup page. This source code is recorded in the general ledger entries and reserves customer ledger entries created when the document is posted. The field must contain a value before the document can be posted; a different source code can be selected when necessary.
- Create risk groups on the Bad Debt Risk Groups page that determine the doubtfulness coefficient. To do this, specify the Code and Name Group.
- On the Bad Debt Risk Coefficient page, set up doubtfulness coefficients by group and period:
| Field name | Description |
|---|---|
| Bad Debt Risk Group | Specifies the code of the risk group, according to which the coefficient of doubtfullness will be determined. |
| Start Date | Specifies the date from which the setting will be used. |
| Quantity Days | Specifies a formula for determining the number of days to determine the debt factor. |
| Reserve,% | Specifies the percentage for debt reserve calculation. |
Note For each combination of Bad Debt Risk Group and receivables term, the last period should be a period not limited by the upper limit. For example > 90. Recommendation: after setting up the Bad Debt Risk Coefficient, use the Check Debt Risk Period function, which will detect if the periods superimposed on each other were specified in the setting.
On the Customer Card, indicate the Bad Debt Risk Group to which the client belongs.
In the Customer Posting Groups settings, specify the accounts:
- Reserve of Overdue Receivables Acc. - specifies the general ledger account used to post the reserve in this posting group.
- Expenses For Reserves of Overdue Receivables Acc. - specifies the general ledger expense account used to accrue the reserve.
- Reserve Adjustment (Decrease) Acc. - specifies the account used when a reserve is decreased and Application of Red Reversal Method is disabled.
When document lines are calculated and before the document is posted, the system checks the reserve and expense accounts for every customer posting group used. When Application of Red Reversal Method is disabled, the reserve adjustment account is also checked. If a required account is blank, document lines or general ledger entries are not created.