Does Unrecoverable Bad Debt Prevent Future Risk and Therefore Profit?

Image result for Future Risk ProfitUnderstanding that profit follows risk, does unrecoverable bad debt prevent business owners from taking risk thereby decreasing future profit?

Unrecoverable bad debt or loss is part of doing business. Companies anticipate and budget for bad debt. What happens when companies fail to collect their receivables and the bad debt expense increases. What is the impact of unrecoverable bad debt on a company’s future profit?

According to a recent article in the Wall Street Journal those that take actual cash loss tend to take less risk in the future. Following that line of thought, a company that has taken a beating on their debt collection will look to tighten its credit policy to reduce risk. If profit follows risk, where are you heading?

Steps to minimize losses to avoid bad debts should include:

To maximize profits now and in the future…Understanding recovery of debt is key, we can help maximize recovery of receivables, design and refine credit policies, collection policies, draft terms and conditions, review your fee dispute provisions so that you can prevent some bad debts and to give you your best chance to collect accounts receivables. Call us at (212)686-0100 or email Jocelyn directly at Jnager@ffgnesqs.com

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