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munirahalias's avatar
munirahalias
Contributing User
6 years ago
Solved

Paying third party on behalf of debtor

Hi.   Our company is operating taxi@cab rental. If renters doesn't pay their rent, we will hire a repossession company to collect the car. After we got the car, we will pay the repo company ASAP. S...
  • Steven_M's avatar
    Steven_M
    5 years ago

    Hi munirahalias 

     

    I would recommend speaking to an accountant in regards to the best way to record that situation. However, from what I can see it would depend on how you accounted for the repo of the car in AccountRight:

     

    The whole process I would use would be:

    1. Write off those outstanding invoices as bad debts.
    2. Record a bill transaction for the repo including the fee
    3. Enter payment on that bill as you would normally do
    4. If the customer does decide to pay you would like to pay for that car you would do a Recieve Money transaction with the Bank Account they pay into being the Deposit into account, the allocation accounts being the bad debt account and the repo fees account. 

    By doing it that way, you would close the invoices as they would be a bad debt, you would have a bill and payment for the Repo company. Along with another transaction to reverse out what you did if they decide to pay out those fees.

Steven_M's avatar
Steven_M
Former Staff
5 years ago

Hi munirahalias 

 

I would recommend speaking to an accountant in regards to the best way to record that situation. However, from what I can see it would depend on how you accounted for the repo of the car in AccountRight:

 

The whole process I would use would be:

  1. Write off those outstanding invoices as bad debts.
  2. Record a bill transaction for the repo including the fee
  3. Enter payment on that bill as you would normally do
  4. If the customer does decide to pay you would like to pay for that car you would do a Recieve Money transaction with the Bank Account they pay into being the Deposit into account, the allocation accounts being the bad debt account and the repo fees account. 

By doing it that way, you would close the invoices as they would be a bad debt, you would have a bill and payment for the Repo company. Along with another transaction to reverse out what you did if they decide to pay out those fees.

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