A late invoice is not a doubtful receivable. You need concrete evidence that it will not be recovered, a reclassification of the customer account, and then a provision calculated on the amount excluding VAT — never on the VAT-inclusive amount. And in Morocco, deducting that provision for tax purposes depends on one precise condition: legal action started within twelve months.
The essentials in five points
- Lateness is only a signal. What makes a receivable doubtful is an objective fact pointing to non-recovery.
- The receivable is reclassified at its VAT-inclusive amount, as a doubtful or disputed customer.
- The provision is calculated on the amount excluding VAT only, because VAT follows a separate regime: under the cash-received regime it never became due.
- Each receivable is assessed individually. A flat rate applied to a total balance is not deductible.
- Deduction requires legal action within twelve months, failing which the provision is added back.
1. Telling lateness apart from real risk
The aged balance flags what is late; it does not grade the risk. Moving an account to doubtful requires something that makes recovery unlikely, not merely overdue.
| Signal observed | Doubtful receivable? | What to check |
|---|---|---|
| 30 days late, active customer | No | Chase it; this is a collections matter |
| Reminders left unanswered | Probably | Reminder history, attempts to contact |
| Bounced cheque or returned bill | Yes | The bank’s rejection notice |
| Customer in liquidation or insolvency | Yes | Official publication, letter from the administrator |
| Open commercial dispute | Yes, as disputed | Correspondence and subject of the dispute |
| Customer unreachable, address unknown | Yes | Returned post, written record |
Document the triggering fact when you observe it, not at closing. A rejection notice or a letter returned marked “not known at this address” is evidence; a recollection is not.
2. Reclassify the receivable, VAT included
Reclassification separates the at-risk customer from the healthy book. It covers the amount genuinely owed, therefore VAT included, since that is the sum the customer owes you.
- Identify the receivable concerned, invoice by invoice.
- Transfer the balance from the ordinary customers account to doubtful or disputed customers (3424).
- Keep the VAT-inclusive amount: it is the receivable being reclassified, not the provision.
- Attach to the file the document justifying the move to doubtful.
- Do not write the receivable off: it remains due while it is not yet lost.
Reclassification has no effect on the result. It is a presentation step that prepares the provision and makes the customer book readable.
3. Calculate the provision excluding VAT
The provision measures the probable loss. But the VAT charged is not lost in the same way as the net amount. Under the cash-received regime — the most common among small businesses — it never became due at all, since nothing was collected: there is nothing to lose on that side. Under the debits regime it was declared, and its treatment is settled separately. In both cases it stays outside the base of the provision.
- The base: The amount excluding VAT of the reclassified receivable. Provisioning the VAT-inclusive amount anticipates a loss you will not fully bear.
- The rate: It follows from the file, not from a scale. A receivable on a customer in liquidation is not provisioned like one merely under dispute.
- Individual assessment: Each receivable is assessed separately, with its own justification. This is a condition of tax deduction, not a refinement.
- The justification: The triggering fact, the reminder history and the reasoning behind the rate chosen, kept together in one place.
The general rules for creating and releasing provisions are covered in the accounting provisions guide. What is specific to a customer receivable is the VAT-exclusive base and the mandatory individual assessment.
Never provision on the VAT-inclusive amount
This is the most common and most mechanical error. The receivable is reclassified VAT-inclusive because that is what the customer owes, but the provision is calculated excluding VAT because VAT follows a regime of its own and is not lost at the same moment or under the same conditions. Provisioning the gross amount overstates the charge, understates the result, and exposes the VAT portion to an add-back.
4. The twelve-month tax condition
A provision can be justified in the accounts and rejected for tax. For doubtful receivables, the Moroccan tax code adds a procedural condition that many discover too late.
- The provision must be created receivable by receivable, each with its own justification.
- Legal action must be started within the twelve months following creation of the provision.
- Failing that, the provision is added back to the taxable result of the year concerned.
- Record both the creation date and the date legal action started in the file.
- Review each provision at the next close: release, keep, or write off.
The practical consequence is strategic: for small receivables, the cost of legal action can exceed the tax saving. It is then more coherent to create the provision knowing it is not deductible, or to write the debt off directly where the conditions allow. That is a judgement to make with your accountant, file by file.
Mistakes to avoid
- Moving a receivable to doubtful on age alone.
- Calculating the provision on the VAT-inclusive amount.
- Applying a flat rate to a total customer balance.
- Keeping no evidence of the triggering fact.
- Forgetting the legal action within twelve months.
- Never reviewing provisions from earlier years.
Frequently asked questions
When does a receivable become doubtful?
When an objective element makes recovery unlikely: a bounced cheque, insolvency proceedings, an unreachable customer, an open dispute. Age alone is not enough, even though it is what draws your attention first.
Is the provision calculated on the net or the gross amount?
On the amount excluding VAT. The receivable is reclassified at its VAT-inclusive amount, but the provision covers only the net amount. Under the cash-received regime VAT never became due, since nothing was collected; under the debits regime it was declared and its treatment is settled separately, with your accountant.
Can I provision a flat percentage of receivables?
In the accounts, a statistical approach is arguable; for tax, no. Deduction requires an assessment receivable by receivable, each with its own justification.
What happens without legal action?
The provision remains possible in the accounts but is added back to the taxable result if no action was started within twelve months of its creation. Anticipate that trade-off at the moment you create it.
Does BelloPOS flag customers at risk?
It provides the raw material. Customer records exist from BelloPOS Lite onward; customer credit tracking and analytics arrive with BelloPOS Go, which lets you spot ageing balances. Classifying a receivable as doubtful and calculating the provision remain accounting decisions.
What to take away
Provisioning a doubtful customer comes down to four moves: establish a fact, reclassify the receivable VAT-inclusive, provision the net amount, and decide with open eyes whether legal action is worth the deduction. The one non-negotiable point is the VAT-exclusive base.
Sources
The figures and rules quoted above come from these pages, read on the date given in the article.
- Ministry of Economy and Finance, General Code of Accounting Standardisation, read 1 September 2026
- Moroccan Tax Administration, 2026 General Tax Code
See who owes you what, and for how long
BelloPOS keeps customer records from Lite onward and customer credit tracking from Go: enough to spot balances that are ageing before they turn into provisions.
Read next
Other practical guides on the same subject: