Bad Debt Recovered Receipt

Bad Debt Recovered Receipt

Bad Debt Recovered

1. Overview

This section outlines the process for recording a payment received for a debt that was previously written off and deemed uncollectible.

Navigation: Client Administration > Search for a Client > Loans > Written Off Tab > Highlight a Written-Off Loan > Bad Debt Recovered Receipt.

A bad debt recovery is a payment received for a loan that has already been written off. When a bad debt is recovered, it is necessary to account for the payment correctly.

Republic of South Africa (RSA) VAT Compliance: If Value Added Tax (VAT) was originally claimed as a deduction when the debt was written off, the VAT portion corresponding to the recovered amount must be declared and paid to the South African Revenue Service (SARS).

2. General Details

When processing a bad debt recovered receipt, you must first enter the following date information.

Field	Description
Effective Date	Enter the date the receipt should reflect in the general ledger.
Transaction Date	Enter the date the receipt should reflect in the general ledger .

After entering the dates, click Next to proceed. To exit without saving, click Cancel.

3. Receipt Event Setup

The Receipt Event field will automatically display "Bad Debts Recovered Receipt." The correct setup of receipt events is critical to prevent permanent data discrepancies.

WARNING: Incorrect event setup will lead to permanent data discrepancies for the client.

For the bad debt recovery process to function correctly, two specific events must be configured on the entity:

1. Bad Debt Recovered Receipt This event records the payment received from the client.

Event Attribute: Must be set to "Bad Debt Recovered Receipt." Only ONE event can have this attribute.
Debit: The bank account or ledger where the payment was received.
Credit: The Client Control Ledger (e.g., 6620-0000).

2. Loan Bad Debt Recovered This event reverses the initial write-off against the Bad Debts Recovered ledger.

Event Attribute: Must be set to "Loan Bad Debt Recovered." Only ONE event can have this attribute.
Debit: The Client Control Ledger (e.g., 6620-0000).
Credit: The Bad Debts Recovered Ledger (e.g., 2400-0000).

4. Amounts and Receipt Details

Enter the details of the payment received.

Field	Description
Total Outstanding	Displays the total outstanding amount of the written-off loan. This is the maximum amount that can be recovered.
Reference Number	If this is a required field, you must enter a reference number. Otherwise, the system will auto-generate a number if the field is set to "Auto Increase."
Amount Received	Enter the total amount paid by the client.
Loan Receipt Amount	Enter the portion of the `Amount Received` to be allocated to the loan. This cannot exceed the `Total Outstanding` amount.
Amount NOT to Allocate Against Loan	This field is automatically calculated (`Amount Received` - `Loan Receipt Amount`). This remaining amount represents change to be returned to the client unless there are other non-loan debit amounts on the client's account to apply it to.
Note	(Optional) Add any relevant notes regarding the receipt.

5. Completing the Process

Use the buttons at the bottom of the page to navigate.

Button	Action
Cancel	Exits the screen without saving any new information or changes.
Back	Returns to the previous page.
Finish	Processes the receipt and finalizes the bad debt recovery .

MAXMONEY Developed by MYCOMAX MICROFINANCE SOLUTIONS. Novamesh 18/06/2026