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Sage Bad Debt Write-Off

Sage Bad Debt Write-Off

Hi,

I have a query that I am sure I have dealt with before and for the life of me, I can't work out why it is causing some confusion this morning.

A debtor balance was written off in the previous financial year (although the year-end has not been run yet so amendments to it can be made.)

The debtor has now settled the full amount of the balance o/s (yay) but I need to reverese the sales credit to written-off sales - which incidentally isn't the normal 8100 - this Company likes to credit back to 4199 - not strictly accurate I don't think but hey ho.

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29th May 2012 09:20

Simples

In whichecer year you choose (strictly PY if not closed and signed off) Dr cash Gross, Cr 8100 Net, Cr VAT with same.  This can all be done via the cash receipt in banking.

Crediting back to 4199 is not at all good practice as it will duplicate the turnover and give a false impression of bad debts suffered.  If there is some nefarious reason for doing this it could amount to fraud, depending on the amounts involved of course!  e.g. Is somebody being paid commission/bonus on sales?!

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By BKD
29th May 2012 09:55

I agree with Richard
The accounting is straightforward, and there can be NO justification for crediting it to a sales code. As he says, the company has recognised a bad debt, which has proved not to be bad, and the accounts should reflect that.

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29th May 2012 10:10

Just re-read my answer

Bl__dy carpel tunnel!!!!!!

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29th May 2012 11:43

Delete or reverse

How about deleting or reversing the write-off? Alternatively, post a dummy sales invoice to (write-back) the bad debt account and process the money received in the normal way.

What's so wrong with 4199, anyway, so long as it is called 'bad debts' and is not shown in turnover when the year-end accounts are completed? It might already be correctly listed in the chart of accounts. Most businesses have their own little quirks like this.

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29th May 2012 14:44

Andy

If you delete the writeoff (not sure it will let you because.....) the VAT won't stack up if it has been claimed back.

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29th May 2012 17:04

Boss

The normal accounting is prescribed however for this case consider recomendations of IAS8(Accounting policies,Change in accounting estimates and errors) once ypou have read the standard and unders tood it. The rest is the normal double entry.

 

Regards Joseph

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