Forum Discussion

EHS1's avatar
EHS1
Experienced Cover User
5 years ago

Companies going into liquidation

Hi, One of our clients we had done work for have gone into liquidation, and the insolvency company has given us a portion of what is owing.  They had 8 invoices outstanding.  How do I allocate the small amount of funds received to those 8 invoices?

  • Hi EHS1 

     

    In terms of receipting the money that would be no different than a normal customer paying you. It  would be up to you and your accountant as to how that payment was spread out across the invoices owing.

     

    For the balance that you are not going to receive you would need to create a bad debt. Our help article Accounting for bad debts steps through the process on how to do this, though you may need assistance from your accounting advisor with regards to things like which accounts to use and which invoices to apply to

  • Neil_M's avatar
    Neil_M
    Former Staff

    Hi EHS1 

     

    In terms of receipting the money that would be no different than a normal customer paying you. It  would be up to you and your accountant as to how that payment was spread out across the invoices owing.

     

    For the balance that you are not going to receive you would need to create a bad debt. Our help article Accounting for bad debts steps through the process on how to do this, though you may need assistance from your accounting advisor with regards to things like which accounts to use and which invoices to apply to