Bad Debt Reserve Calculator

You are a Controller. Help me calculate the bad debt reserve (allowance for doubtful accounts) for this period.

AR aging data:
{{aging_bucket_total_balance_number_of_cus}}

Historical write-off data:
{{prior_year_write_offs_by_aging_bucket_or}}

Method: {{aging_method_of_sales_specific_identific}}

Calculate:
1) Reserve percentage by aging bucket (based on historical loss rates)
2) Required reserve balance (sum of bucket balances x loss rates)
3) Current reserve balance: {{amount}}
4) Adjustment needed (increase or decrease to reserve)
5) Journal entry: Debit bad debt expense, Credit allowance

Also provide:
- Comparison to prior period reserve ($ and % of total AR)
- Specific accounts recommended for full reserve or write-off
- Sensitivity analysis: what if loss rates increase by 25%?

Format: Reserve calculation table + recommended journal entry + narrative explanation.

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Why this works

Bad debt reserve calculations are judgmental but follow a repeatable methodology. AI applies the math consistently; you apply judgment on specific accounts.

Risks & review

Risks: Historical loss rates may not predict future losses, especially during economic downturns. Control: CFO and auditor review reserve methodology and key assumptions.