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bad debt and provision for bad debt configuration

Former Member
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i need bad debt and provision for bad debt configuration step and entry from the end user view point

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Answers (2)

Answers (2)

Former Member
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thanks for reply still i have some doubt

1Prov for Bad Debts A/c to be created under two a/c group one is exp and second is liability.

2.what is the need of reserve for bad debt recon A/c and creation process.

3.how to post  actual bad debt .you providing entry only for provision for bad debt

Former Member
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Hi Rahul

This link will help you more and hope this will resolve your issue. Thanks

http://scn.sap.com/thread/882670

Regards

Former Member
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the link provide further created confusion

Former Member
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Hi Rahul,

as per your doubt

we are creating 3 gl to maintain all bad debt provision

1 . bad debt rec. account - which is created to transfer the invoice amount to customer bad debt account after a certain period . i.e. we will think about the loss may happen ,but not sure

this entry is bad debt account dr    To customer account

2. provision for bad debt - this is maintain to for the future provision for bad debt under the liability sade of the balance sheet , in this some part of the current profit is transferred to bad debt provision account to over come the bad debt loss . if in-case there is no bad debt , the amount will transfer to net profit by retaining the future bad debt provision , 

Accounting entry is provision for bad debt a/c dr.       to retained earning a/c or p/l a/c

3. bad debt expenses account - this account is maintain to show the loss due to bad debt

when we come to know the customer is not going to pay any more i e its a loss for the company

that time we will utilized the provision amount for the loss incurred

the accounting entry is bad debt expenses a/c DR .......... TO provision for bad debt a/c wrt contingent liability for bad debt rec account

so that the customer will not clear till he has not paid the full due amount

hope it will clear your doubt

Former Member
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Hi Rahul

Greetings!

F104 is the T_ Code for posting the PBD entry

Provision for Bad Debts (exp) Dr

To Provision for Bad Debts (Liab)

Step 1:OB04 :You can define here the % of provision.

Step 2:FS00 :Creation of necessary GL Accounts like:

                         a. Bad Debts; b. Prov for Bad Debts-(EXP&LIAB); c. Bad Debts Recon a/c and reserve for bad                               Debts Recon a/cs (Both CUST Recon G067)

Step 3:FD01Create Customer

Step 4:F-22 Post Invoices

Step 5:OBXD Bad Debt to Provision for Bad Debt

Step 6:OBXY SDRS TO Bad Debt Recon

Step 7:F103 DRS TO Recon

Step 8:F104 Bad Debt to Prov for Bad Debt

Step 9:F-28 Bank to Customer (E -indicator)(Residual Or Partial Payment in each Invoice).

For more clarification you can refer to the below links:

http://help.sap.com/saphelp_47x200/helpdata/en/96/8b32c443ce11d189ee0000e81ddfac/frameset.htm

http://help.sap.com/saphelp_47x200/helpdata/en/01/a9c6a5455711d182b40000e829fbfe/fram

Thanks

Regards