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Bad debts configuration steps in SAP

Bad debts configuration steps

Step 1:  – Define Methods

Access the transaction using one of the following navigation options.

SAP IMG Path: – SPRO > IMG > Financial Accounting > Accounts Receivable and Accounts Payable > Business Transaction > Closing > Valuate > Reserve for Bad Debt > Define Methods.
Transaction Code: – OB04

On the “Change view “Receivable provision: Methods”: overview” select new entries to define the percentage of provision.

bad debts new entries

bad debts entries

Step 2: – Creation of GL accounts – FS00

gl bad debts

gl ac bad debts

Step 3: – Define Accounts for Reserve and Bad Debts

SPRO > Financial Accounting > Accounts Receivables and Payables > Business transactions > Closing > Valuate > Define Accounts for Reserve and Bad debts
Transaction Code: – OBXD

> Enter Chart of accounts and press enter

> Select Debit/credit and provision method under accounts are determined based on.

> Save the settings.

accounts are determined based on

On the “Configuration Accounting Maintain: Automatic posts – accounts” update the following information

Configuration Accounting Maintain Automatic posts  accounts

Step 4: – Special GL Account for the Bad debts – FBKP

Select account type and enter reconciliation account and special G/L account

special gl accounts

Step 5: – Transfer posting for doubtful Receivable 

SAP Path: – Accounting > Financial Accounting > Accounts Receivable > Periodic processing > Closing > Value > Receivable transfer posting (Gross)  

Transaction Code: – F103

  • Enter customer account.
  • Enter appropriate provision method. 
  • Special G/L Indicator for Doubtful Rec: E (Reserve for bad debts). 
  • Enter reconciliation account. 
  • Batch input session name as SAPF103. 
  • Posting Key:09 (special gl debit), Posting document: DA (customer document).
  • Execute (F8).

transfer posting for doubtful receivable

Successfully bad debts are configured in the SAP.