We have a debt recovery firm who is acting on our behalf to collect debts from clients. It is a novelty and I now received a first cheque from them as a payment recovered from one of our clients.
My question is how do I record it on sage. Should I create a new N/C within 4000's sales and record it as a bank receipt?
You will presumably need to reduce the debt that the customer owes, so I would post it as a customer receipt against the customer's account as normal. Did they deduct costs from the payment?
Thanks. I have started accounts records from 1 May 2013. This client is not on a system but I guess I can create an account for them and put all they owe us as an openning balance on 30/04/13. I assume it is going to be included in Bad debts on P&L sheet for end of the year. We are invoiced seperately for Recovery costs. As long as I know these expenses are added to recovery amount. At the monet I record them on N/C Legal costs. Does it sound about right?
Have you got opening balances to enter onto Sage (i.e a Trial Balance from the previous year's accounts)? The client ought to be entered as an outstanding debtor at the start of the year. Then you can record the amount recovered against the balance owing.
With regard to the separate invoice for the recovery costs, yes you can record them against legal costs and then you must remember to add them to the client's account, possibly using a nominal code in the 4000 range as recovery or other charges.
