Bad Debt Relief

The Bad Debt Relief process:

Enter selection criteria & Search Open Entries for Bad Debt Relief

Specify the search criteria in the Receivables Bad Debt Relief (tfacr2514m000)/ Payables Bad Debt Relief (tfacp2514m000) sessions to view the open entries for Bad Debt Relief. These sessions displays the invoice information and the amounts (such as Tax amount, received amount, outstanding amount, recovered amount) that are related to bad debt relief. Only open entries for which tax is declared are visible. Bad Debt Relief is only applicable for transactions for which VAT is included for an earlier VAT return.

Use the Unassigned Open Entries option from the Reference menu in the Invoice-to Business Partner Open Entries (tfacr2520m000)/ Invoice-from Business Partner Open Entries (tfacp2520m000) sessions to view the unassigned amounts for a business partner. You can access this session using the Open Entries option from the Reference menu in the Receivables Bad Debt Relief (tfacr2514m000)/ Payables Bad Debt Relief (tfacp2514m000) sessions. This helps the user to decide whether to relief bad debt for open entries or to assign the unallocated receipts/payments.

Note: In some countries such as UK, you are not allowed to relief open entries for which receipts are not assigned. The outstanding balances of the earliest invoices must be settled first with the unallocated receipts / advances.

Assessment of selected Open Entries

Use the Open Entry Details (tfacr2525s000)/ Open Entry Details (tfacp2525s000) sessions to view the details of the open entries for Bad Debt Relief. You can access this session using the Details option in the Receivables Bad Debt Relief (tfacr2514m000)/ Payables Bad Debt Relief (tfacp2514m000) sessions.

Use the selection criteria in the Receivables Bad Debt Relief (tfacr2514m000)/ Payables Bad Debt Relief (tfacp2514m000) sessions and apply the filter to narrow the selection of invoices. Special attention must be paid to the Age Receivable. This range applies to the age of the invoices that are visible. Age Receivable from 6 to 6 means that as from the day as today invoices are selected in the month 6 months prior to the current month. (example: on September 3, the range 6 – 6 selects invoices of which the document date is on or after March 1, and on or before March 31. The range 6 – 7 selects invoices of which the document date is on or after February 1, and on or before March 31.) Select the Select by Tax Period check box to select the invoices for bad debt relief. Select the Suppress check box to prevent bad debt relief on a given invoice.

Note: The value added tax (VAT) of invoices must be declared and submitted. Else, the bad debt relief is not allowed. (Invoices are not visible until their tax declaration is submitted.)

You can decide not to trigger the Bad Debt Relief process for specific Open Entries. You can select the Suppress check box in the Receivables Bad Debt Relief (tfacr2514m000)/ Payables Bad Debt Relief (tfacp2514m000) sessions, to stop the Bad Debt Relief process for the selected Open Entry. You can also add the comment regarding Bad Debt Relief in the Text field.

Activating the Bad Debt Relief process

You can use the Process option in the Process Bad Debt Relief (tfacr2214m000)/ Process Bad Debt Relief (tfacp2214m000) sessions to initiate the Bad Debt relief process. You can access these sessions using Process Bad Debt Relief option in the Receivables Bad Debt Relief (tfacr2514m000)/ Payables Bad Debt Relief (tfacp2514m000) sessions. After the process is initiated, the selected invoices must be relieved and the journals are created automatically to relieve the tax in a bad debt relief.

The Process Bad Debt Relief (tfacr2214m000)/ Process Bad Debt Relief (tfacp2214m000) sessions enables you to process the bad debt relieves. You must specify posting details, such as posting date, period, and document series in this session. You can use the range to select data based on business partner, transaction type, invoice period, document.

You can either post the Bad Debt Relief, or print the simulation of bad debt relief transactions. You can use the printed data to verify the relief documents.