- The module is useful when:
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You wish to check if the policy of recognizing provision for doubtful debts is reasonable
You need to calculate an allowance for bad and doubtful debts very quickly
You have to compute doubtful debts provision and you have not much more than a debtors ageing report
You wish to check if your computation of allowance for doubtful accounts does not contain material errors
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Service description24iValue imitates the process of thinking and the actions a conventional audit-accounting expert implements to calculate bad and doubtful debt provisions. The system will guide you step by step through the process of calculation, so that debtors provision can be estimated reasonably even without knowledge in this field.
24iValue is based on proven audit methods of calculation of provision for doubtful debts. You will quickly calculate the provision for bad debtors and you can save a lot of time, as you will need just a small amount of information.
Using this module is recommended if you do not know how to determine the provision for doubtful accounts, especially when you have a limited amount of information, and need a tool that will quickly and reliably calculate it.
24iValue can also be used as a tool for checking the reasonableness of already established bad and doubtful debts allowance, especially when you cannot find someone ales to independently review your calculation of the necessary write-down.
Do you know that ... ?
Often an assumption is made that no problem exists with current debtors accounts while no collection history is analysed to prove that. Provision for bad and doubtful debts (allowance for bad and doubtful debts) should also cover debtors that are not overdue as most probably at least part of them will become uncollectible in the future.
Only an adequate analysis can help to calculate doubtful debts provision on such kind of potentially bad debtors.
The determination of rules to recognise the provisions for doubtful debts or inventory provisions so that they reflect the reality and specific features of a company is a major challenge.
How can we determine the appropriate percentages of a provision for bad and doubtful debts or of a provision for slow moving inventory and how can we verify the applied accounting policies?
Incorrect policies of recognising a provision for slow moving inventory or doubtful debtors may distort the financial result. If we do not tailor the accounting policies to the company and actual events that take place, the provisions and allowances will likely be inadequate to future developments.
If we have no idea how to verify, if, the approved policies of recognising provision for doubtful debts or inventory provision are adequate, we often do not challenge the accuracy of the policies at all, which however, is a major error. On the other hand, we may look for various ways to verify the provisions; however, that may cost lots of time and would not guarantee that the assessment of the applied policy is correct.
The desired effect can be achieved by using easier methods, tested practically by others. With 24iValue, everybody can learn how to check the computation of allowance for doubtful accounts or calculation of a provision for a slow moving inventory applying methods used by auditors. The testing of provisions for debtors and slow moving inventory provisions becomes affordable and easy. 24iValue supports those persons who have no idea how to reliably assess these provisions.
We save lots of time. We do not need advanced methods to assess the provisions. Finally, we do not have to guess what the reasonable amount should be.
With 24iValue, time is saved not only by the person who assesses the provisions but also by the staff who prepare the information that is required for the calculation of an inventory provision or the computation of an allowance for doubtful accounts. The savings are made possible with little information required by 24iValue to determine reasonable charges. Finally, there is a tool supporting independent verification of the bad debts and an inventory provisioning policy applied in your company. The provisions are not unrealistic, as the 24iValue tool combines verification with past events in the company.
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Provision for Doubtful Debts