Transfer to Bad Debt

Explanation

This activity is used to classify an invoice as a bad debt instead of writing it off directly. This is because customers may occasionally be unable to pay their debts, but if they are likely to be able to pay in the future you may chose to classify these customer invoices as bad debt instead of writing them off directly. You can still pay the invoices directly, or you can reverse the bad debt classification back to Normal and then pay the invoice. 

Prerequisites

• The bad debt level(s) must have been defined beforehand in the Bad Debt Levels window.
• Posting type PP15 - Bad Debt Transfer must be defined in the Posting Control window.
• If bad debt provision is to be calculated, posting types PP73 to PP75 must be defined in the Posting Control window.
• No other payment transaction with later voucher dates should exist for the relevant invoice (this does not apply to rolled back transactions).

System Effects

The ledger status of the invoice changes from Normal to Bad Debt. The ledger posting is also changed from posting type IP2 to PP15. If a provision percent is defined for the selected bad debt level, bad debt provision will be calculated and posted to posting types PP73 and PP74.

Window

Bad Debt Management

Related Window Descriptions

Bad Debt Management

Procedure

1. In the Bad Debt Management window, select the invoice you want to transfer to bad debt, right-click and then click Transfer to Bad Debt.
2. Specify the bad debt level to be applied for the Invoice in the Bad Debt Level field. The default bad debt level will be displayed automatically. You can also use the List of Values to select a bad debt level. Once the bad debt level is selected, the provision percent is automatically displayed, if it has been defined for the relevant bad debt level.
3. The system date (today's date) appears by default in the Voucher Date field but the values in this field are editable. The Accounting Period field is automatically populated according to the date in the Voucher Date field.
4. Current user's default user group is presented in the User Group field. However, you can use the List of Values to specify a different user group which has been predefined for the current user.
5. In the Voucher Type field, current user's default voucher type from Function Group B appears by default, but you may use the List of Values to specify a different voucher type.
6. If you want to copy the code parts (Code B to J) from the customer invoice, select the Copy Code Parts check box.