Bad Debt’s Impact on Sales Bigger Than You Think

Bad DebtAre you working harder to earn the same or less money? Bad debt write-offs affect more than just a company’s income for a given year; the write-off has a direct impact on the need for future sales.

Consider this, the numbers are astounding:

You wrote-off an account with a $50,000.00 balance. Your profit margin on that sale was 6%. In order to compensate for the loss, you will now need to produce additional sales of $833,333.00. That’s more than ¾ of a million dollars in new sales to compensate for the uncollected receivable of $50,000.00.

When broken down in this way, it is easy to see how one write-off can have a multiplier effect. A lot of hard work, time and effort is spent compensating for a customer who does not pay their balance. It is far easier to maximize recovery on the receivable rather than increase the sales force exponentially.

Consult FFGN immediately when payment is not made in accordance with the terms of sale. Let us maximize your recovery on receivables so that you do not have to work so hard. Let us do the hard work; after all, bad debt is our business.

Bad Debt Write-Off