Data Set up for Bad Debt Relief and Recovery

Bad Debt Relief and Recovery setup

The setup of Bad Debt Relief and Recovery includes following steps:

• Specify the accounts for Bad Debt Relief / Recovery and Interim Tax Accounts in the Chart of Accounts (tfgld0508m000) session. The Account Type of the Tax Accounts must be set to Balance Sheet. The Account Type of the Ledger Account that are used for Bad Debt Relief and Recovery has to be set to Balance Sheet. However, you can also set the Account Type to Profit & Loss for the Ledger Account used for Bad Debt Relief and Recovery.
• Specify the Transaction Type for Bad Debt Relief / Recovery in the Transaction Types (tfgld0511m000) session. The Transaction Category and the Transaction Subcategory must be set to Journal Vouchers and Transaction Currency Journal.
• Specify the following fields on the Bad Debt tab in the ACP Parameters (tfacp0100m000) and ACR Parameters (tfacr0100s000) sessions:
  • Bad Debt Relief Account
  • Bad Debt Recovery Account
  • Transaction Type for Bad Debt Relief
  • Series for Bad Debt Relief Documents
• Specify the Tax Accounts for Bad Debt Relief and Recovery in the Tax Codes by Country (tcmcs0536m000) session. The ledger account for Bad Debt Relief and Recovery must be specified in the Posting Data for Single Tax Codes (tfgld0571m000) and Posting Data for Multiple Tax Codes (tfgld0570m000) sessions. For each tax code the following sales and purchase accounts must be setup:
  • Tax Account for Bad Debt Relief in Purchase;
  • Tax Account for Bad Debt Recovery in Purchase;
  • Tax Account for Bad Debt Relief in Sales;
  • Tax Account for Bad Debt Recovery in Sales

• Note: You must setup the tax codes for which the bad debt relief / recovery are required. You must assess the tax codes which are eligible to bad debt relief/recovery. For each of these tax codes you need to setup the mentioned purchase and sales accounts.

• Verify or adjust Tax Position to declare tax adjustments in correct tax position in the Tax Positions (tfgld0120m000) session. The Tax Adjustment Type in the Relations by Tax Position (tfgld0121m000) session can be used to select applicable tax transactions for a given tax code.