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Uncollectible receivables have a considerable risk and can reduce the level of company profitability. Therefore, every company needs to pay special attention to the management of receivables so as not to cause losses. One of the appropriate methods for recording bad debts in the financial statements is the reserve method. Therefore, the company forms a reserve based on estimates of receivables that are estimated to be uncollectible. The purpose of this study is to evaluate the way accounting treats receivables and how this impacts the financial statements. Using primary data, this research was conducted at KOPERINDO JATIM Kandat, which is located at Jl. Raya Kediri, Kandat Village, Kandat District, Kediri Regency, East Java 64173. Quantitative descriptive analysis was used to analyze the data. The results of the analysis show that, using the percentage of sales approach, the total amount of bad debts will reach Rp23,272,860 in 2024. In contrast, using the reserve method with the percentage of receivables approach, the amount of bad debts will reach Rp120,669,520 in 2024. Based on these results, the calculation of the reserve method with the percentage of receivables approach is in accordance with the theory, which aims to add the amount of accounts receivable to the total receivable.

. Implementation of adjustments in the payment system from postpaid to prepaid for PT. PLN ULP Rantepao with the objective of reducing bad debts, but the accounts receivable report demonstrates an increase in bad debts over the last 3 years. The goal of this research is to examine the internal control system for bad debts in accordance with COSO. The descriptive qualitative method was used in this research. Using a random sampling technique, interviews, documentation, and observation were conducted. The sample used in this research is saturated. The significance of this research stems from the fact that bad debts have a significant impact on the company's financial health performance. (1) Changes to the prepayment system have no effect on the reduction in bad debts, according to the research results. (2) The internal control system at PT. PLN ULP Rantepao has not been properly implemented in terms of the 5 COSO components. Instances in which the risk assessment, control environment, and monitoring activities have been implemented, but only a few of each COSO component's items have been implemented. In the meantime, neither control activities nor information and communication have been properly implemented. (3) Control activity is relatively more influential in fostering the emergence of bad debts due to the low paying power and awareness of customers in meeting their obligations. This research will be more interesting if it is continued by investigating the failure factors of changing the prepaid payment system in an effort to reduce bad debts using a variety of research methods.