Sage X3 provides a feature in which you can manage the entire bad debts process, which includes defining the types of bad debts managed like impairment, doubtful receivables, and write-offs and the automatic journals and analytical dimensions applied for journal entries.
There is a setup screen Bad debt term’s function (GESBDT) to create the terms to apply in calculating bad debt values.
Path: All > Setup > Financials
In Bad debts management (BADBTGEN), you can define which company and which bad debt management rule is used, select which open items are used to create new bad debts, and select the accounting date. The Generation type is always Debit/Credit.
Path: All > Setup > Financial>Closing processes
This new functions is protected by the BADBT – Bad debt management activity code.
Use this function to create journal entries based on late charges calculated according to the terms defined in the Bad debt terms function (GESBDT).
Bad debt is an account receivable due to a business when the repayment of credit previously extended to a customer is estimated to be potentially uncollectible. Bad debt is a contingency that must be accounted for by all businesses that extend credit to customers because there is always a risk that payments will not be received.
To generate a list of open items to consider, select criteria such as company, bad debt rule, reference date, number of days, site, etc.
The Bad debt selection screen opens to display open items that are eligible for bad debts, grouped by company. If a bad debt has already been issued for an open item, the already processed column displays a value. On the click of OK button below selection screen is displayed in which you can select transaction.
Path: Financials > Utilities > Miscellaneous > Control account transfer
This screen displays open items eligible for bad debt management based on your search criteria. Open items are grouped by customer, site and currency and the data displayed in the grid cannot be modified except for the Percentage column, which is always a percentage of the Item balance.
From the Action icon on each line, you can view the original invoice, the original journal entry or the analytical dimensions. By default, the analytical dimensions for the company display. You can change these for the open item, but you must create the bad debt before closing the Analytical allocations screen to apply you changes.
Open items with a temporary balance are highlighted in pink.
You can select all open items or individual items by selecting Yes or No from the Select column.
When you click Create, a journal entry is created for each selected open item. A new screen opens where you can select the Accounting date. The Generation type is always Debit/Credit and cannot be modified
Using Bad debts management you can track and record your bad debts in X3 system. Hope this blog helps you in accounting your Bad debts more efficiently!
