Carpon
Valued Contributor
Bad debts in commerce and financing refers to debts that become non refundable as a result of some factors may be the death of the debtor or his inability to pay or bring something in exchange.
This really kills a business and can even be able to take away some amount of your invested capital and that is why bad debts must be avoided.
Bad debts can be avoided by;
• Limiting who and whom not to grant credit purchase or lend money to. Some persons are known for their failure in the aspect of debt settling and you should avoid granting them the chance to make credit purchases especially if you have their record of payment failure.
• You may at some point need to ban the act of credit sales in your firm. If you constantly face such issue, you can decide to abolish the permittence of any thing that can escalate to bad debt.
This really kills a business and can even be able to take away some amount of your invested capital and that is why bad debts must be avoided.
Bad debts can be avoided by;
• Limiting who and whom not to grant credit purchase or lend money to. Some persons are known for their failure in the aspect of debt settling and you should avoid granting them the chance to make credit purchases especially if you have their record of payment failure.
• You may at some point need to ban the act of credit sales in your firm. If you constantly face such issue, you can decide to abolish the permittence of any thing that can escalate to bad debt.
