When a bad debt could not be collected after trying all possible collection methods, than a record adjustment must be made to reflect the uncollected payment. This is known as a Bad Debt Write Off. A general journal entry must be made to reflect the uncollected sale.
The basic for the accounting procedure is the same; the actual procedure depends on the accounting system you are using. Here is a helpful video courtesy of Doris Cahill on how to write off bad debt using MYOB accounting system.
Just because nobody complains doesn’t mean all parachutes are perfect.
‘Handling customer complaints is an important part of keeping your business healthy and profitable. If you want your customers and clients to come back again you must meet and exceed their expectations consistently. When that doesn’t happen you end up with a complaint — if you are lucky.
A typical business hears from only 4% of its dissatisfied customers. The other 96% quietly go away and 91% of those will never return. Continue reading →
The truth is that many operating businesses do not have properly drafted and defined invoices given to their customers/clients.
I have seen it too many times that often very important information is simply missing from the invoice. This causes confusion with clients, but more importantly, it creates great problems when the business debt needs to be collected. With an invoice like this, you can be certain of one thing; it will affect your business and hurt your cash flow.
‘As I go through all kinds of feelings and experiences in my journey through life — delight, surprise, chagrin, dismay — I hold this question as a guiding light: “What do I really need right now to be happy?” What I come to over and over again is that only qualities as vast and deep as love, connection and kindness will really make me happy in any sort of enduring way.’ Salzberg
‘If you’re a debt collector, it’s like getting struck by lightning every now and then. You’re having a great day and then BLAM! Your debtor who you chase for payment starts being really unpleasant and yelling at you over the phone. Something is terribly wrong and you are in the hot seat.
“Shallow men believe in luck, believe in circumstances….Strong men believe in cause and effect.” — Ralph Waldo Emerson
Ok, you are asking, “What does my business have to do with unethical cash collecting?” To explain this I am happy to share my recent personal experience, so just keep on reading…
Recently, due to my child not feeling well, I was urgently flying back home from a seminar in Melbourne with a major Australian airline. As their frequent flyer member with a return ticket for the next day, I did not expect any major problems. I was greatly mistaken! Continue reading →