Raise a specific bad-debt provision against an invoice

What it does

A specific provision names a single doubtful invoice — 60+ days overdue with no contact, customer in administration, that sort of thing — and parks an allowance against it. This is distinct from the General Provision, which is a statistical estimate across your whole AR ledger; the specific provision is for the debts you can point at.

The post is DR Bad Debt Expense (6800) / CR Allowance for Doubtful Debts (1190) for the provision amount. The invoice itself stays on the books — the receivable survives until one of three terminal states:

• recovered — customer paid after all. The provision reverses.
• written_off — AR cleared, the original invoice flips to void.
• provisioned — held here until 1 or 2.

Bad-debt accounts (6800, 1190) auto-create on first provision per entity, so you don't need to seed the chart.

How to use it

1. Open the customer invoice (typically from Aged debtors) and click Raise provision on the action bar.
2. Enter the provision amount. Often it's the full outstanding, but you can provision partially if recovery looks possible.
3. Add a reason — auditors will read this. "Customer in administration as of dd/mm/yyyy" beats "Doubtful".
4. Confirm. If the amount is under the policy threshold the provision posts immediately; over the threshold and it lands in pending_approval first.
5. Once posted, the invoice shows a Provisioned badge and the aged report deducts the provision from net outstanding — so the total at the bottom is what you actually expect to collect.
6. If the customer pays, mark the provision Recovered. The reverse journal posts and the invoice carries on through normal AR reconciliation.
7. If the debt is definitively gone, mark it Written off. The AR line clears and the invoice flips to void.

Tips

• The provision is on the invoice row, not the customer. One customer with five doubtful invoices needs five provisions — that's deliberate so the audit trail is per-invoice.
• VAT bad-debt relief is independent — it fires automatically 6 months after the invoice due date if the customer hasn't paid. See VAT bad-debt relief.
• Approval gating uses the same approval-policy engine as bills and payment runs. Configure thresholds in Settings → Approval policies with applies_to='bad_debt_provision'.
• Don't double-provision: the General Provision calc nets out specific provisions before applying its bucket percentages, so raising a specific provision automatically reduces what the general policy would otherwise post.

Related

• Configure the General Provision policy
• VAT bad-debt relief — when it auto-fires
• Aged debtors & creditors