Write-off of bad debts

Write-off of bad debt

The "Write-off of bad debt" service is intended for organizations and enterprises that are faced with the impossibility of collecting accounts receivable or payable. This service includes debt analysis, preparation of necessary documents and execution of the write-off procedure.

What does the service of writing off bad debt include?

Writing off bad debt includes the following stages:

• Debt analysis and determination of its badness;
• Preparation of documents for debt write-off;
• Preparation of a tax invoice for writing off accounts payable (sample provided);
• Making accounting entries to write off bad receivables;
• Preparation of a debt write-off report for tax authorities.

Step-by-step procedure for providing the service

1. Preliminary consultation. Consultation with the client to determine the amount of debt and its hopelessness.
2. Collection of information and documents. Collection of all necessary documents and information to prepare for debt write-off.
3. Preparation of documents. Preparation of a package of documents for writing off bad accounts receivable and bad accounts payable. Preparation of a tax invoice for writing off accounts payable (sample).
4. Making accounting entries. Making the necessary accounting entries to write off bad debts.
5. Preparing a report. Drawing up a debt write-off report and submitting it to the tax authorities.

Terms of Service

The bad debt write-off service can be provided under the following conditions:

• Availability of documents confirming the bad debt (court decisions, reconciliation reports, documents on the counterparty's liquidation, etc.);
• Inability to collect the debt by all available methods;
• Client's consent to the write-off procedure;
• Provision of all necessary information and documents for the write-off procedure.

Procedure for writing off bad debt accounts receivable

The procedure for writing off bad debts includes the following steps:

• Analysis of debt and its classification as bad;
• Preparation of documents and tax invoices;
• Making accounting entries to write off debt;
• Preparing a report and submitting it to the tax authorities.

Assistance of a lawyer in writing off bad debt

Assistance of a lawyer in writing off bad debt consists in providing professional legal support at all stages of the write-off process. Let's consider the main aspects of this assistance.

• Debt analysis. The first step in providing assistance from a lawyer is to analyze the debt. The lawyer assesses the legality of the write-off requirements, classifies the debt as hopeless and checks the availability of all necessary documents to confirm the hopelessness of the debt.
• Preparation of documents. The lawyer helps to collect and prepare all the necessary documents for writing off hopeless accounts receivable and payable. This includes the preparation of a tax invoice for writing off accounts payable (sample), reconciliation reports, court decisions and other documents confirming the impossibility of debt collection.
• Making accounting entries. The lawyer advises the company's accounting department on the necessary accounting entries to write off bad debts and bad debts. This helps to correctly formalize all financial transactions and avoid tax risks.
• Preparing a report. The lawyer helps to draw up a report on debt write-off for submission to the tax authorities. This includes preparing an explanatory note, collecting all supporting documents and preparing a report in accordance with the requirements of tax legislation.
• Representing the client's interests. The lawyer represents the client's interests in the tax authorities when considering issues of debt write-off. He participates in the hearings, provides additional evidence and arguments, protecting the rights and interests of the client.

Terms of assistance

A lawyer's assistance can be provided under the following conditions:

• Availability of documents confirming the hopelessness of the debt (court decisions, reconciliation reports, documents on the liquidation of the counterparty, etc.);
• Inability to collect the debt by all available methods;
• Consent of the client to the write-off procedure;
• Provision of all necessary information and documents for the write-off procedure.

Questions and Answers

What determines the cost of the bad debt write-off service?

The cost of the bad debt write-off service may vary depending on several key factors . Let's consider the main ones that affect the final price.

1. Volume and complexity of debt. The first and most significant factor is the volume and complexity of debt. The larger the amount of accounts receivable and the more complex the structure of accounts payable, the higher the cost of the service. This is due to the need for a more thorough analysis and preparation of relevant documents, such as an act of writing off accounts receivable or an order to write off accounts payable.
2. Legal and tax aspects. The process of writing off accounts receivable includes many legal and tax aspects. For example, writing off accounts receivable of budgetary institutions requires a special approach, taking into account specific legal provisions. Similarly, when writing off bad accounts payable, transactions must be made taking into account all tax consequences, including VAT.
3. Need for an audit. If an audit is required to write off the debt, this also increases the cost of the service. An audit may be necessary to confirm the hopelessness of the debt and justify its write-off in accounting.
4. Documentation. The cost of the service may depend on the amount of work on documentation. For example, preparing a sample order to write off accounts receivable, write-off acts and other necessary documents takes time and a professional approach. This is especially important for budgetary institutions, where each procedure must be strictly regulated.
5. Professional qualifications of specialists. The experience and qualifications of the specialists providing the service also play an important role in determining the cost. Highly qualified specialists with experience in writing off accounts receivable and payable can provide higher quality and faster services, which, accordingly, is reflected in their price.