I want to make a Provision for doubtful debt which will net the Account receivable figure and also disclosed in the Profit and lose statement as an expense. Is there a way to do this in Manager?
The way to do this is to simply create two new general ledger accounts:
- Provision for doubtful debt (expense)
- Less: Allowance for doubtful debt (asset)
I think that’s the correct way to call those accounts.
Then make journal entry to debit expense and credit asset.
Maybe in future, this will be in-built feature so you don’t have to do it through journal entries.
That it i guess. An in built one will be okay. but provisions are usually once in the year entry when publishing accounts so i think the journal entry is okay for now
Do we have something on providing provisions…
The question is, how would you expect in-built feature to work? Set somewhere something like
10% of accounts receivable balance to be doubtful debts and let Manager to make automatic entries?
Let me put across the situation … We sometimes know that a specific amount or an approximate amount has to be paid for some service/ job work etc that is already done, but we would not have received actual documents to effect that transaction under accounting.
In such case we may have to have a provision, where in we book this as an expense ( provisional) and at later stage get it regularised with necessary documents.
This will reflect as provision in P&L/ Balance sheet etc and taxation is calculated accordingly.
May be very useful during annual account closing.
U decide what works best for this …
Still we have to do the same for treating bad debts or in built feature for doubtful debt has been added in newer version?
@Tut your say about doubtful debts?
There is no automatic or built-in feature for bad debts.
By the way, @Muhammad1, I am not a developer of this software. I am just another user.
@Tut yeah brother i know but the reason for tagging you is your knowledge about this software and your prompt reply