How to Record Bad Debts and Bad Debts Recovered in Envoici

Bad debt refers to loans or outstanding balances owed that are no longer deemed recoverable and must be written off. This expense is a cost of doing business with customers on credit, as there is always some default risk inherent with extending credit.

How to Record Bad debts and Bad Debts Recovered

Step 1: Create the Bad debts and bad debts recovered account.

For that Go to Accounting > Chart of Accounts > New Account.

Fill in all the details:

Enter the account name – Provide the name of new account head in Name

Select account group from the drop down – Select the corresponding group for the new account head in the drop down menu.

Enter the effective date – Record the effective date of account creation.Opening balance- NILL (there is no need for opening balance as it is an income and expense account).

Click on save.

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