1.Define MethodsHere you need to define methods means after how many months client want to reclassify asbad debts and at percentage for how many months.2.Define Accounts for Reserve for Bad DebtHere you need to assign bad debts expenses account and provisionaccount.User end transactions:1. Run F103:It transfers the normal open items to special gl E.Entry:Customer account SP gl EdebitedCustomer account2. After F103 you need to F104 for bad debts postingBased on the percentages maintained for how manymonths. System will automatically calculates the bad debtsEntry:Bad debts DrProvision CR.The above steps are for automatically calculation of Bad Debts.If client doesn't want then tell them to pass manual entries.
You need the following settings for SP GL transactions1. SP GL indicators- You can use any of the existing available indicators2.OBXY in case of customers-Assign these indicator for the combination of account type and customerreconciliation account. You also need alternative reconciliation account to capture these transactions3. OBXT in case of vendors.