Estimate an allowance for doubtful accounts from my AR aging
Calculates a supportable bad-debt reserve from aging buckets and history, with specific-reserve calls and the journal entry.
The prompt
Help me estimate the allowance for doubtful accounts (bad-debt reserve).
AR aging report: [PASTE - customer, balance by bucket: current, 1-30, 31-60, 61-90, 90+]
Historical write-offs and recoveries: [last 2-3 years by bucket or overall]
Current allowance balance: [AMOUNT]
Known problem accounts: [e.g. "Customer X filed for bankruptcy", "Customer Y disputing $12k"]
Economic or industry changes: [ANYTHING that makes history less reliable]
Framework: [US GAAP - CECL / IFRS 9 / other]
Steps:
1. Propose loss rates per aging bucket from the history I gave; if history is thin, say so and show a range.
2. Identify accounts that need a specific reserve instead of the general rate, and explain why.
3. Adjust for current conditions only where I've given a reason - don't invent economic factors.
4. Calculate the required allowance, compare it to the current balance, and show the true-up entry.
5. List accounts that look like write-off candidates now.
Return:
1. Calculation table: Bucket | Balance | Loss rate | Reserve.
2. Specific reserves with rationale.
3. Total required vs. booked, and the journal entry.
4. A short memo paragraph explaining the method, suitable for my workpapers.
Mark any assumed rate as [ASSUMPTION - CONFIRM]. Have the method reviewed by my controller or auditor.
Highlighted [brackets] are blanks to replace with your own details.
Fill in the blanks and use this promptMore Finance & Accounting prompts
What to fill in
- last 2-3 years by bucket or overall
- AMOUNT
- ANYTHING that makes history less reliable
- US GAAP - CECL / IFRS 9 / other
- ASSUMPTION - CONFIRM
How this prompt is built
This prompt follows the RTF structure (Role, Task, Format). RTF tells the model who to be, what to do and what shape the answer should take. It is the quickest structure that still gives noticeably better results than a bare request.
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