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Thread: Bad Debt journal entry

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    Bad Debt journal entry

    Hi there,
    Please could someone kindly assist with the correct way to enter the following journal entry into Pastel Accounting:
    A Customer of ours has gone into liquidation and we are most likely not going to receive the balance of his invoice.
    I need to write this outstanding amount off as Bad Debts. How do I process this transaction correctly in Pastel?
    Thanks

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    Platinum Member Neville Bailey's Avatar
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    Process a customer journal for the customer, crediting the customer with the amount to be written-off, using the tax code 05 (VAT on Bad Debts) and the Bad Debts expense account in the Contra column.
    Neville Bailey - Pastel Accounting Consultant and Photographer
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    Hi Neville –

    I’ve experienced basically the same problem, but could managed to solve it with your reply on JeandA’s post, however, I did not change the description leaving it to read ”Bad Debt” and now I’m in trouble as the person involved is not very happy about it – He wants it only to be read as “Written Off”.

    Is there a way that one can change this?

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    Platinum Member Neville Bailey's Avatar
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    Hi Kobie,
    Tea
    Unfortunately it is not possible to change the description of a journal, once it has been updated.

    However, I can edit the transaction through the "back-end", using my database editing software.

    Let me know if you have TeamViewer installed on your computer - if you do, we can arrange a quick session so that I can edit the transaction for you.
    Neville Bailey - Pastel Accounting Consultant and Photographer
    neville@accountingsoftwaresupport.co.za
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    *** 20% DISCOUNT ON PASTEL XPRESS / PARTNER SOFTWARE UNTIL 15 DECEMBER 2017 ***

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    WALLACE WATTLES (1860-1911)

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    Hi Neville –

    Thanx for your quick response and that you are always prepared to assist with what-ever difficulties we experienced.

    Approximately what will the costs be, as I most probably will have to pay this myself?

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    Platinum Member Neville Bailey's Avatar
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    Hi Kobie,

    Please email me direct (see my signature below) and I will email you a quote.
    Neville Bailey - Pastel Accounting Consultant and Photographer
    neville@accountingsoftwaresupport.co.za
    www.accountingsoftwaresupport.co.za
    View Neville Bailey Photography

    *** 20% DISCOUNT ON PASTEL XPRESS / PARTNER SOFTWARE UNTIL 15 DECEMBER 2017 ***

    "Give every person more in use value than you take from them in cash value."
    WALLACE WATTLES (1860-1911)

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    Site Caretaker Dave A's Avatar
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    Quote Originally Posted by Kobie vd Walt View Post
    I’ve experienced basically the same problem, but could managed to solve it with your reply on JeandA’s post, however, I did not change the description leaving it to read ”Bad Debt” and now I’m in trouble as the person involved is not very happy about it – He wants it only to be read as “Written Off”.
    If the debt was incorrectly raised, perhaps the debtor has a point as it should be reversed rather than written off as a bad debt.

    However, if it was a fair debt, I'd be inclined to revert to the client and advise the fee to have the description changed is x -
    Payable in advance of course
    The trouble with opportunity is it normally comes dressed up as work.

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    Hmmm, I'm also trying to imagine the scenario where a debtor would be dictating to me, the wording of a debt been "written off". If its a genuine refund for returned stock or incorrect pricing we issue credit notes.

    If its a debt that is due and is not going to be paid and so we have to write it down by passing a journal, well then personally I damn well will write "bad debt". I'd probably do it in capital letters and add expletives in a remarks line

    So I suppose it all depends on the reasoning, but rather ignore me as I'm taking this post beyond the scope of the OP, sorry.

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    Full Member EAB's Avatar
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    I am with BusFact on this one.

    If I have to write off debt for a customer because the customer is simply not paying and the customer then has demands on what I can and can not show on the statement. This will not end well.

    If there is another reason then the best would to post a credit note.

    If you fail to pay and the debt needs to be written off, you can surely not make demands on how the company treats is.

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