I don't think anybody could come up with a standard because it would depend on what business you're in and where, what kind of customer relationships you manage to keep, how well you fulfill the promises you make, the economy and so many other factors.
There is no guidance in accounting standards specifically with regard to the %age to use for bad debts. Provisions in general are covered by FRS12. Bad debt reserve levels are typically based on past experience. So if a company has traditionally suffered10% bad debts p.a. then it would seem prudent to set up a10% provision. What the auditors are trying to establish is why the company has set its bad debt provision at the rate that it has.
The justification should refer to past general experience. Specific experience with the customer in question or the market / country."
PDC receivable keep it in the memorandum as the transaction is on the future date. you can enter with the future date posting (if the software allows) however, if bounced on due date reinstate the amount and pass the reversal entry of bank and make revised provisions
Doubtful debts are those debts which a business or individual is unlikely to be able to collect. The reasons for potential non-payment can include disputes over supply, delivery, the condition of item or the appearance of financial stress within a customer's operations. When such a dispute occurs it is prudent to add this debt or portion thereof to the doubtful debt reserve. This is done to avoid over-stating the assets of the business as trade debtors are reported net of Doubtful debt. before provision for Bad debts must need to last few years sales again bad debts, It is up to the business, same business also country to country can see difference because of people attitude. I think better way study past year and do that or If we are beginner of business should study competitor accounts.
