Bad Debt Write Off & Provision Explained: Codes 8100 & 8102

Debtors code 1106 shows the balance sheet provision for doubtful debts, but the expense side of that story — the actual cost hitting the profit and loss account — lives here in Overheads.

The codes, and what each one holds

Code 8100 — Bad Debt Write Off records debts formally written off as uncollectable during the period, once it's clear the money genuinely won't be recovered.

Code 8102 — Bad Debt Provision records the movement in the provision for doubtful debts recognised in the profit and loss account — an estimate made before any specific debt is confirmed as unrecoverable. Both are Overheads & Depreciation codes and normally carry a debit balance.

A worked example

Say a customer owing £1,200 goes into liquidation and the debt is confirmed as unrecoverable, while separately the year-end review increases the general doubtful debt provision by £600 based on a broader assessment of collection risk.

Bad Debt Write Off (code 8100): £1,200 debited, with a matching credit clearing the specific customer's balance out of Debtors.

Bad Debt Provision (code 8102): £600 debited, matched by a £600 credit increasing the general Provision for Doubtful Debts (code 1106).

Why this matters day to day

Keeping specific write-offs separate from the general provision movement gives a much clearer picture of bad debt experience — one is a confirmed loss on a named customer, the other is a forward-looking estimate across the whole Debtors book. Reviewing both regularly, rather than only at year end, helps a business spot a deteriorating customer base early enough to tighten credit terms before losses mount further.