Go back

How would I enter the provision for bad debt journal? Should I open a Customer called “Provision Account” to do this through the sales module?

If it is an actual write off, you should simply credit the invoice on the customer's account and code the credit to Bad Debts Expense (6-xxxx) instead of the usual income account (4-xxxx). 

If it is only a provision for a bad debt (ie: you are not actually writing it off yet, you just suspect it might get written off at some point) then you don't need to do anything in the debtors ledger, you should just do a journal as follows:

DR Bad Debts Provision 6-xxxx

CR AR Accruals 1-xxxx (Do not use Accounts Receivable as this is linked to the debtors ledger)  *** NOTE: This journal would be reversible if and when the actual debt is written off as per our first instruction above.

Go back