Managing doubtful customers
When a company's closing date is approaching, it is recommended to carry out accounting inventory works. One of the tasks to perform consists in assessing the inventory value of items, such as customers receivables resulting from recovery difficulties.
The company can decide to first mark the receivable as doubtful, then issue an accounting provision.
As a reminder, doubtful receivables are established receivables (known to the debtor) that a company has against customers of doubtful solvency or towards conflicting customers.
Doubtful receivables refer to the amount of debts which a company may fail to recover due to customers insolvency or conflicting invoices at the end of an accounting period.
For insolvent customers, the conflicting invoice(s) will no longer be paid; the receivable is therefore considered as irrecoverable.
Note
Before a debt is considered as irrecoverable, the customer must first be marked as doubtful. You cannot directly mark a customer's debt as irrecoverable.


The following DMFs must be enabled:
0816** BANKING DOUBTFUL CUSTOMERS *
081601 BANKING DOUBTFUL CUSTOMERS CHANGE CUSTOMER TO DOUBTFUL
081602 BANKING DOUBTFUL CUSTOMERS CHANGE CUSTOMER TO NON-DOUBTFUL
081603 BANKING DOUBTFUL CUSTOMERS CHANGE CUSTOMER STATUS
081604 BANKING DOUBTFUL CUSTOMERS CHANGE INVOICE TO DOUBTFUL
081605 BANKING DOUBTFUL CUSTOMERS CHANGE INVOICE TO NON-DOUBTFUL
081606 BANKING DOUBTFUL CUSTOMERS CHANGE INVOICE STATUS
081607 BANKING DOUBTFUL CUSTOMERS DOUBTFUL INVOICES
081608 BANKING DOUBTFUL CUSTOMERS DOUBTFUL CREDIT NOTES
081609 BANKING DOUBTFUL CUSTOMERS DOUBTFUL CUSTOMER RECEIPTS
081610 BANKING DOUBTFUL CUSTOMERS CHANGE INVOICE TO IRRECOVERABLE
081611 BANKING DOUBTFUL CUSTOMERS PROVISION MANAGEMENT
081612 BANKING DOUBTFUL CUSTOMERS SETUP

This step enables you to determine the statuses and accounts to use when generating entries for these statuses.
To do so, go to Tools > Setup > General setup > Accounting > Doubtful customer - Status.
Fill in the following information:
- Code
- Label
- End date: this date will enable you to render a status inactive
- Provision for depreciation of current assets: the help list displays class 6 accounts.
- Transfer of provisions for depreciation of current assets: the help list displays class 7 accounts.
- Provision for depreciation of accounts receivable: the help list displays class 4 accounts.
- Loan loss: the help list displays class 6 accounts.
- Doubtful control account: the help list displays all the collective accounts
- Journal (miscellaneous transaction type): the help list displays the miscellaneous transactions journals
- Project: the help list displays all internal projects

To use this feature, you must first report doubtful customers:
1 | To do so, open a Customer record sheet and click on the Finances tab. |
2 | In the Doubtful status section, enter the following information: |
- Status: indicates the status (cannot be modified)
- Status date: indicates the date when the customer was changed to "Doubtful" (cannot be modified).
- Irrecoverable date: indicates the date when the customer was changed to "Irrecoverable" (cannot be modified).
This information will be used when searching for doubtful customers.
In the customers search results, you can do the following actions for multiple customers at once:
- Change the selected customers to doubtful
- Change the status
- Change the selected customers to non-doubtful

From the desired customer record sheet, go to Edit > Accounting view > Doubtful account > Change the customer to doubtful.
A window opens and enables you to enter a new status for the customer as well as a new date:
- Status: the list of status marked as Doubtful.
- Date: the current date by default (can be modified).
- Journal: by default, it is the journal specified in the status setup.
Thereafter, all invoices that will be issued on this doubtful customer will direct towards the doubtful control account.
This feature will:
- Mark the customer as doubtful
- Mark all unpaid invoices as Doubtful.
- Generating the journal entries necessary to change the customer's balance to doubtful

From the desired customer record sheet, go to Edit > Accounting view > Doubtful account > Change the customer's status.
A window opens and enables you to enter a new status for the customer as well as the date:
- Status: the list of status marked as Doubtful.
- Date: the current date by default (can be modified).
- Journal: by default, it is the journal specified in the customer record sheet then in the status setup.
Thereafter, all invoices that will be issued on this doubtful customer will direct towards the doubtful control account.

From the desired customer record sheet, go to Edit > Accounting view > Doubtful account > Change the customer to doubtful.
A window opens and enables you to enter a new status for the customer as well as the date:
- Date: the current date, by default (can be modified).
- Journal: by default, it is the journal specified in the customer record sheet then in the status setup.
This feature will:
- Unmark the customer as doubtful
- Unmark all unpaid invoices as "doubtful"
- Reverse the accounting entries to change the customer's balance to "non-doubtful".

Open an Invoice record sheet and click on the Information tab, then fill in the fields in the Doubtful status section.
- Status
- Status date
- Provision amount
- Irrecoverable date

From the desired invoice record sheet, go to Edit > Doubtful account > Change the invoice to doubtful.
This only applies when the invoice is not completely paid.
This feature will:
- Mark the invoice as doubtful.
- Generate the accounting entries needed to change the customer's balance to doubtful

From the desired invoice record sheet, go to Edit > Doubtful account > Change the invoice to not doubtful.
This feature opens a window to enable you to enter the following information:
- Date: the current date, by default (can be modified).
- Journal: by default, it is the journal specified in the customer record sheet then in the status setup.
An entry will be generated per non-paid invoice, with a hyperlink to open the entry.
This feature will:
- Unmark all unpaid invoices as "doubtful"
- Unmark all unpaid invoices as "doubtful"
- Reverse the accounting entries to change the customer's balance to "non-doubtful".

From the desired invoice record sheet, go to Edit > Doubtful account > Change the invoice status.
This feature will open a window to enable you enter a new status for the invoice as well as the date:
- Status: the list of Doubtful statuses.
- Date: the current date, by default (can be modified).
- Journal: by default, it is the journal specified in the customer record sheet then in the status setup.
All new invoices that will be issued on this doubtful customer will direct towards the doubtful control account.

When creating invoices on a doubtful account, all the lines in your sales invoice must direct towards the doubtful control account.
All entries will therefore be generated on this doubtful control account.
Invoices will have to be marked as doubtful and the status date will be the invoice date.

To manage provisions (grants and recoveries), go to Accounting > Periodic works > Doubtful debt management.
From the search results screen, you can perform the following actions:

The provisioning percentage can be updated for one or multiple lines at once.
This percentage enables you to set the debt amount to pay in.
The default percentage is 100%.

The search result displays a standard input column for the amount paid in, with the provision amount saved from the last accounting position.
By right-clicking on one or multiple lines, you have access to the Change amount to pay in and Change percentage to pay in features.

The Change amount to pay in feature enables you to enter an amount in euros. Once saved, the value in the Amount to pay in column is automatically updated.

The Change the percentage to pay in feature enables you to enter a percentage. Once saved, Akuiteo calculates the new paid in amount and the Amount to pay in column is automatically updated.

You can enter the amount in euros directly in the table. Once saved, the value in the Amount paid in column is automatically updated.

You can validate the provisions from the header of the search results table. This will enable you to log the information in the table and generate accounting entries.
During the validation, a context window enables you to choose:
- an entry date;
- a journal; This field is linked to the list of miscellaneous transactions journal.
- a project.
Note
Selected lines can be modified.

Only doubtful receivables can be changed to irrecoverable. To do so, follow these two steps:
Step 1: Change to irrecoverable
This action can be performed:
- From a customer record sheet, via Edit > Accounting view > Doubtful account > Change to irrecoverable;
- From a customers search results, via the Change to Irrecoverable feature;
- From a sales invoice, via Edit > Doubtful account > Change to irrecoverable;
- From a sales invoices search results, via the Change to irrecoverable feature.
Choose an entry date and a journal. The Journal field is linked to the list of miscellaneous transactions journals.
Step 2: Recover provisions
This action must only be performed if there is an existing provision.