Xero Aged Receivables and Bad Debt Provision Review
Review overdue invoices and the basis for provisions.
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Review receivables in Xero as educational material. Aged receivables by customer and band, credit notes, write-offs this year, and notes on disputes: [RECEIVABLES_DATA]. Sales for the year: [ANNUAL_SALES]. Provision policy if any: [PROVISION_POLICY]. Treat disputes separately from late payment. Calculate total receivables, the share over 60 and 90 days, days sales outstanding (receivables divided by annual sales times 365), the five largest debtors as a share of the total, and write-offs as a share of sales. Worked bands: current 18,000, 1 to 30 days 7,500, 31 to 60 4,200, 61 to 90 2,100 and over 90 days 3,000, total 34,800, of which 5,100 or 14.7 percent is over 60 days. Explain in educational terms how some businesses estimate doubtful debts by applying an assumed percentage to each band, and why the percentages must come from the business's own history and from advice; list questions for the accountant about provisioning rules in my place, how to record it and how it affects tax [VERIFY]. Customer communication by band: a friendly reminder under 30 days, a phone call at 31 to 60, and a formal letter and payment-plan conversation at 61 to 90, with stop-supply decisions made by a named person. Provide a call script, a message for disputed invoices, and a payment plan template (amounts, dates, consequences of missing a payment, agreed in writing); record promises to pay in the contact notes. Do not suggest legal action; recommend taking advice. Interest, fees and recovery steps depend on the contract and local law [VERIFY].
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