How to Process and Record Bad Debts in the System

An explanation of how to handle bad debts. Bad debts are amounts you don’t expect to collect from customers. You can handle them in Qoyod through a manual accounting entry.

Steps

1. From the sidebar menu

   • Go to Accounting

   • Select Manual Journal Entries

2. Add a new entry

   • On the debit side (Debit):
     Select the Bad Debt Expense account
     If it doesn’t exist, create a new account under Expenses named “Bad Debt” or “Bad Debt Loss”
     Enter the debt amount (for example, 1000 SAR)

   • On the credit side (Credit):
     Select the Receivables account
     And specify the customer who did not pay

3. Save the entry

After saving
The amount decreases from the customer’s balance
And appears as bad debt expense in reports

If the customer pays later

Record a reverse entry to return the amount as bad debt recovery income

Important notes

• Make sure to review the customer’s balance before recording the entry

• Keep a copy of any document proving the debt could not be collected