How-to
Configure the General Provision policy
Apply a % per aged AR bucket and post a single bad-debt journal at period-end.
Jump to section
What it does
The General Provision is a policy-driven estimate of doubtful debts across your whole AR ledger. You define a percentage per aged bucket (current / 1–30 / 31–60 / 61–90 / 90+ days overdue); the engine applies those percentages to your net outstanding AR (gross of unpaid amount minus any specific provisions already raised); the delta vs your prior posted provision becomes a single DR Bad Debt Expense / CR Allowance for Doubtful Debts journal.
This complements per-invoice specific provisions. Specific provisions name the dodgy debt; the general provision covers the statistical baseline you can't pin to a single customer. They don't double-count: the general calc nets specific provisions out before applying the percentages.
How to use it
- Open Bad debts and click Manage on the General Provision card.
- Set your percentages per bucket. UK practice typically lands
around
0 / 0 / 5 / 10 / 50. Tune based on your debtor experience. - Toggle Enabled on. The policy is opt-in per entity — until you flip the switch, the Post journal button refuses.
- Pick the as-at date (defaults to today; usually period-end).
- Click Recompute to see the bucket breakdown live: net outstanding × % per bucket = provision per bucket, summed to a target total.
- The card shows the delta vs the current general provision in force. If non-zero, click Post journal. It debits Bad Debt Expense (or credits, if you're reducing) and credits Allowance for Doubtful Debts (or debits, if reducing) for the signed delta.
Tips
- The policy applies to net outstanding (after payments + specific provisions). Don't manually subtract those — the engine handles it.
- The post is idempotent against re-clicks: only one
activerow is in force at a time. Previous ones are markedsuperseded, not reversed. The full history is on the Manage modal. - If you realise your % was wrong, use Reverse on the active row to flip the journal cleanly. Use this for policy corrections only, not for individual customer recoveries (the engine recomputes next period and naturally rebalances).
- The general provision is independent of approval policies — there's no per-tenant threshold. Owners and accountants who manage Bad Debts can post freely.