Bad Debt Provision Calculator
Not every receivable on the books will actually be collected. An ageing-based provision turns that judgment into a number — the older the balance, the higher the provision usually applied.
Ageing-based bad debt provision calculator
A provision % by ageing bucket, applied to that bucket’s receivable balance — the older the balance, the higher the judgmental provision rate usually applied.
| Ageing bucket | Receivable balance (₹) | Provision % | Provision (₹) |
|---|---|---|---|
| 0-30 days | ₹18,000 | ||
| 31-60 days | ₹21,000 | ||
| 61-90 days | ₹36,000 | ||
| 90+ days | ₹48,000 |
Educational illustration only. The provision percentages above are illustrative defaults, not a prescribed standard — real provisioning rates are a matter of judgment based on a business’s own collection history and the specific facts behind each balance.
Why rates rise with age
A receivable that’s 10 days old is usually still well within normal credit terms. One that’s 200 days old has typically already survived several failed follow-ups — history shows that the older a balance gets, the less likely it is to ever be collected in full, which is why provisioning rates climb with the ageing bucket rather than staying flat.
Judgment, not a formula from a standard
No accounting standard prescribes the exact percentages — a business sets its own rates based on its own collection history, industry, and customer base, and revisits them periodically as actual write-offs confirm or challenge the assumption.
Build the full ageing report first
This provision sits on top of the 4-bucket ageing analysis taught in Advanced Excel for Finance & Business, and the recoverability judgment behind it is covered from an audit perspective in Advanced Audit & Assurance.