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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?



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.


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