Creating Reserves for Bad Debts

In order to calculate overdue receivables and generate reserves and expenses on them, follow these steps:

1. Click , that opens Search function, input Reserves for Bad debts List and click this link.
2. Create a new Reserves for Bad Debts document.
3. In the General tab, fill in the following fields:

Field name	Description
No.	Specifies the Document No. of the Reserves for Bad Debts.
Posting Date	Specifies the posting date of the Reserves for Bad Debts.
Document Date	Specifies the document date of the Reserves for Bad Debts.
Posting Description	Specifies the description of the Reserves for Bad Debts Doc.
Date Analysis Type	Date Analysis Type = Posting Date Document, the quantity of days of Bad Debts must be calculated from the posting date. Date Analysis Type = "Due Date Document", the quantity of days of Bad Debts must be calculated from the Due Date of the document.
Reserve Posting Type	Specifies the Reserve Posting Type of the Reserves for Bad Debts Doc.

Note
When forming the Reserves for Bad Debts under the obligations of the Customer in a currency that is different from the local currency of the company, it is necessary to calculate exchange rate differences at the exchange rate as of the date of posting for the document of reserves of Bad Debts. This will update the amount of debt in the original currency of the company.

4. In the Filter tab, you can fill in the filter conditions for receivables:

• Customer Posting Group - specifies the Customer Posting Group by which the receivables will be filtered. It is a filter which can restrict the generation of document lines by Customer Posting Group.
• Bad Debt Risk Group - specifies the code of the Bad Debt Risk Group, according to which the coefficient of doubtfullness will be determined. It is a filter which can restrict the generation of document lines by Bad Debt Risk Group.

5. Use the Calculate function - on the request page that opens, you can configure additional filters. In this way, the lines of the document will be generated.

Document lines are generated for ALL customer transactions that were Opened on the reserve calculation date, as well as for those transactions for which the amount of reserve transactions is not zero. If among the open customer operations there are the ones that can be applied to each other, then before calculating the lines, the system will warn the user and offer to perform the application first.

Note
Customer transactions must be applied at the time the reserve is calculated to avoid unnecessary charges. Therefore, if there is an unapplied payment or credit note on the client that can potentially completely cover all open accounts and refunds (considered in the context of contracts and the possibility of setting up "Application taking into account contracts" on the customer card), the program will not create reserve lines for these transactions.

The lines in the Reserves for Bad Debts document have the following fields:

Field name	Description
Customer No.	Specifies the Customer No.
Customer Name	Specifies the Customer Name.
Agreement No.	Specifies the Agreement No.
Document Analysis Type	Specifies the type of the document based on which the Reserves for Bad Debts are calculated.
Document Analysis No.	Specifies the number of the document based on which the Reserves for Bad Debts are calculated.
Document Analysis Date	Specifies the analysis date of the document in the line - depending on the settings, either the Posting Date or the Due Date.
Bad Debt Risk Group	Specifies the code of the Bad Debt Risk Group, according to which the coefficient of doubtfullness will be determined.
Days Qty.	Specifies the Days Qty of Bad Debt.
Reserve, %	Specifies the coefficient of doubtfullness of the reserve in percentage.
Amount Including VAT (LCY)	Specifies the remaining amount (LCY) in the Customer Ledger Entry, which will be used as a basis for calculating the reserve amount.
Bad Debt Reserve Amount by Period (LCY)	Specifies the reserve amount, calculated as a percentage of the the remaining amount (LCY) in the open Customer Ledger Entry.
Applied Reserve Amount (LCY)	Specifies the amount of the already applied Bad Debts Reserve.
Accrual Reserve Amount (LCY)	Specifies the reserve amount, based on which the G/L entries will be created (takes into account the already applied reserve amount).
Customer Posting Group	Specifies the Customer Posting Group.
Order No.	Specifies the Sales Order number from which the sales invoice was posted.
Costcentre Code	Specifies the code for Shortcut Dimension 1, which is one of two global dimension codes that you set up in the General Ledger Setup window.
Global Dimension 1, 2	Specify the codes for the Global Dimensions.

At the time of Document posting, General Ledger Entries and Reserves Customer Ledger Entries are generated. Also, the information on the current amount of accrued reserve is also recorded in the Customer Ledger Entries.
To view the created entries in posting, go to the Posted Reserves for Bad Debts document and click Find Entries.