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- Bankruptcy and Bankruptcy Code
- Business Entities
- Departmental Operations
- Allowances
- Bad Debt Write offs; Bad Debt Losses
- Calculating Bad Debt Reserves
- Bad-Debt Write Offs; Uncollectible Accounts Receivable
- Computer Skills and the Credit and Collection Function
- Consignments; Consignment Sales
- Credit and Sales; Using Salespeople as Collectors; Team Based Account Management
- Credit Department and Organizational Structure
- Key Activities of the Credit Department; Role of the Credit and Collections Department
- Credit Department Goals and Objectives
- Credit Department Organization; Centralized vs. Decentralized Credit Operations
- Credit Policy Overview
- Divestitures
- Downsizing the Credit Department; Planning and Pitfalls; Outsourcing
- Economic Downturns; Recessions; Layoffs
- Electronic Data Interchange (EDI)
- Finding, Attracting, and Retaining the Best Employees
- Escalating A/R Problems to Management
- The Credit File; Keeping the Credit File Current
- Improving Inter-Departmental Relationships
- Lockbox; Bank Lockboxes; Improving Cash Flow
- Motivation and Performance
- UCC 1 Perfection by Filing
- Required Areas of Knowledge for a Credit Professional
- Impact of Bad Debt Write Offs; Bad Debt Losses
- Shipping Procedures
- Improving the Effectiveness and Efficiency of the Credit Function
- Building Bridges Between Sales and Credit
- Dormant Accounts
- Training Collectors
- Customer Retention
- Working Proactively in Credit and Collections
- Goal Setting for the Credit Department
- Myths about Credit Management
- Credit Practices
- Collection Practices
- Financial Analysis
- Financing Methods
- International Credit
- Laws and Regulations
- Payment Methods
- Performance Measures
- Security Instruments
- Career Management, and Job Change
- Credit Website Tools
- Upcoming Educational Events
- Credit and Collections Tools and Tips
- Tips on Creating Better Emails
- Generating Effective Credit Correspondence
- Exporting
- Accounting
Impact of Bad Debt Write Offs; Bad Debt Losses
Bad debt write offs are a cost of doing business on open account terms. No matter how careful the credit department reviews existing customers and new applicants, losses are inevitable. Many people do not realize the impact of bad debt write offs. For example, a business that reports net income after tax of 5% that experienced a bad debt loss of $100,000 would need to generate an additional $2 million in sales to offset that $100,000 bad debt write off.
Copyright 2010 by Michael Zininberg & Michael Dennis. Mr. Zininberg can be reached with questions or comments at mzininberg@gmail.com