NEWS

Bad debts represent accounts receivable (invoices) that are unlikely to be collected due to various reasons. In this latest blog post we give you a quick summary as to why it is important to write off your bad debts.

 

Benefits of Writing Off Bad Debts:

• Removing bad debts ensures that your financial statements reflect the true financial state of your business.
• Writing off bad debts can be claimed as a tax deduction, reducing your taxable income and potentially lowering your tax liability.
• By letting go of uncollectible debts, you can redirect your resources towards more profitable customers and opportunities, thereby improving overall revenue generation.

 

Best Practices:

• Regularly review accounts receivable to identify bad debts promptly.
• Adhere to clear credit policies to minimise the risk of bad debts.
• Maintain open communication with customers to address payment issues early on.

Writing off bad debts is essential for maintaining accurate financial reporting, optimising cash flow, and focusing on profitable ventures.

 

As your trusted accounting partner, we're here to assist you in navigating this process effectively. Don't hesitate to reach out for personalised guidance tailored to your business needs. Remember, taking proactive steps to manage bad debts secures your financial stability and fosters long-term success.