To set up a bad debt provision

If you haven't already read the Customer Credits Overview, see Handling customers' bad debt for more information.
  1. If not already created, create an asset account called Provision for Bad Debts. (If you need help creating this account, see Creating accounts.)
  2. If not already created, create an expenses account called Bad Debt. (If you need help creating this account, see Creating accounts.)
  3. Select Record Journal Entry in the Nominal Ledger Command Centre and complete the date and memo fields.
  4. For the first line item, enter the allocation account for the Bad Debt Provision and enter the amount in the Credit column for the amount of the debt that probably will not be collected.
  5. For the second line item, balance the journal entry by entering the account used for Bad Debts, and entering an amount in the Debit column for the amount of the debt that probably will not be collected. The Out of Balance amount will be zero.
  6. Click Record.