As bills receivable (pending and overdue) get older, increasing fractions of their balances are accounted as a bad debit provision until the total value of such balances are reached, according to certain periods of time (as of a reference date).
The bill status is analyzed based on a reference date as follows:
For accounting, the standard entry to be used is 51A.
Procedures
1. By accessing Bad Debit Provision, click Percentages to define periods and percentages for provisions.
2. A screen is displayed to define 10 periods (in days) with the respective percentages to be calculated on bill balances.
3. The reference date used is from the system (dDataBase).
4. You do not need to enter all periods because bill are classified into the ones entered.
Example
For bills overdue (concerning the reference date) for more than (days) | Balance fraction to be accrued (%) |
60 | 40 |
120 | 80 |
180 | 100 |
5. After defining the periods, click Related Features, and then Generate Provisions.
6. A new screen is displayed to parameterize or confirm the process.
7. Click Questions and fill out data according to field help instructions. While filling data out, you can also define the minimum provision value to be considered, that is, provisions with absolute value lower than this minimum one are not generated.
8. Click Data, and then Run.
9. To view the provisions generated for a certain bill, click Related Features, and then View Prov.
See Also