more-arw search

Q&A Forum

Accounting for estimated Sales amount

Terry Marlink's Profile

We will soon be billing a new charge to our business partners that will likely be contested. I believe it would be prudent to only recognize something like 75% of the invoiced amounts.

Any suggestions on a better method than recording a 25% bad debt reserve?

Thanks.

Answers

Len Green
Title: Performance Improvement Consultant and E..
Company: Haygarth Consulting LLC
LinkedIn Profile
(Performance Improvement Consultant and ERP Strategist, Haygarth Consulting LLC) |

Yes-high level idea:
when you bill post the invoice total to deferred revenue. Then release 75% to earned revenue. When they pay the whole amount-100%-release the other 25%.
If they pay anything less than 100%, charge the shortfall % to a "unrecovered" account and net it off in P/L reporting.

135 views
Topics

Get Free Membership

By signing up, you will receive emails from Proformative regarding Proformative programs, events, community news and activity. You can withdraw your consent at any time. Contact Us.

Business Exchange

Browse the Business Exchange to find information, resources and peer reviews to help you select the right solution for your business.

Learn more

Contribute to Community

If you’re interested in learning more about contributing to your Proformative community, we have many ways for you to get involved. Please email content@proformative.com to learn more about becoming a speaker or contributing to the blogs/Q&A Forum.