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.

Real-world examples across industries

Construction and contracting

A contractor writes off a £14,000 invoice after a client goes into liquidation before paying — a debit of £14,000 to 8100 (Bad Debt Write Off) and a credit of £14,000 to 1100 (Debtors Control Account), clearing the specific customer's balance. Because payment chains in construction run main contractor to subcontractor to sub-subcontractor, a single collapse further up the chain is a real and recurring risk rather than a one-off, so the same contractor also tops up its general provision by £5,000 to reflect that sector-wide exposure across the rest of its book — a debit of £5,000 to 8102 (Bad Debt Provision) and a credit of £5,000 to 1106 (Provision for Doubtful Debts).

Wholesale and distribution

A wholesaler with hundreds of trade accounts applies a blanket 2% provision across its debtor book rather than assessing each customer individually. As debtors grow from £400,000 to £460,000 over the year, the provision moves from £8,000 to £9,200 — a debit of £1,200 to 8102 and a credit of £1,200 to 1106. Separately, a small stale balance of £340 from a customer that's ceased trading is written off outright: a debit of £340 to 8100 and a credit of £340 to 1100. Only the specific £340 write-off is deductible for corporation tax purposes — the general provision movement, however prudent, isn't.

Retail and hospitality

A shop or restaurant is more likely to see a string of small write-offs — a bounced cheque, a disputed card chargeback, a corporate tab never settled — than one large bad debt. A £180 write-off is a debit of £180 to 8100 and a credit of £180 to 1100. What's usually missing here is any 8102 balance at all: with most sales settled by card or cash at the point of sale, there's rarely a meaningful trade debtor book to provide against in the first place, so a formal doubtful debt provision often isn't worth maintaining.

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.