Bad debts of Business?

[tyrim88]

Concerning bad debts of business. Well, I believe that bad debt is referred to when a customer refuses to pay for goods, products or services rendered om credit and in expectation to pay in at when due but goes south. These kind of customer or debtors are business killer which doesn't want growth for such business

A lot of things can actually cause a business owner to go into bad debt,it could be as a result of poor financial management or lack of his ability to recover funds from customers.This have a way of running down a business.

 

[Toyoabasi]

What are the bad debts of the business? How bad debts occurs during operation of the business? And how these are treated in financial statements of the company?
Your knowledge is great and need suitable answer because I have to do it in financial statements.

I have never incurred bad debts in my business. Bad debt could be incurred as a loan and they are surely a liability.
Bad debts can also come from the part of customers who are not able to make outright payments for goods and services obtained.

 

[Justin]

One of the major reasons of business failure is bad debt. If people buy form you on credits and they don't pay you back, that's bad debt. If you cannot collect moey from your creditors, your business is doomed

 

[Abigael]

I think that bad debt in business is that loan that has been taken without a proper plan. Especially if it is taken to do impulse buying for things that the business can do without. When such a loan is taken, it becomes so hard for the business person to pay it back.

 

[Godspower]

Bad debts are money owed by customers that and you have been unable to collect it. Such debts are always written off going forward in financial statements.

 

[Trexxxy]

People in the comments have done justice to your question, bad debts for organisation occurs when the organisation relies on constant borrowing and are unable to repay these loans.

 

[Shigobad20201]

A lot of things can actually cause a business owner to go into bad debt,it could be as a result of poor financial management or lack of his ability to recover funds from customers.This have a way of running down a business.

I have seen a lot of business man goes into debt because he need to save his company from going into extinction but at the long run , he couldn't save the company and the debt later turn into bad debt.

 

[tyrim88]

I have seen a lot of business man goes into debt because he need to save his company from going into extinction but at the long run , he couldn't save the company and the debt later turn into bad debt.

That is the main reason why a good business person should always look at the avenue from which the revenue of his business would be able to maintain and repay any debt he is collecting,the business need to hav proven itself in terms of performance to gather enough confidence for some certain loans.

 

[eLdavis]

I think that bad debt in business is that loan that has been taken without a proper plan. Especially if it is taken to do impulse buying for things that the business can do without. When such a loan is taken, it becomes so hard for the business person to pay it back.

Hmmm from what you have said, do you think does companies or organization who are unable to pay back the loans borrowed lacked proper planning?

 

[Kaffyfolla]

Bad debt occasionally called Uncollectible accounts expense is a monetary amount owed to a creditor that is unlikely to be paid and for which the creditor is not willing to take action to collect by force

 

[Sotherefore]

Bad debt occasionally called Uncollectible accounts expense is a monetary amount owed to a creditor that is unlikely to be paid and for which the creditor is not willing to take action to collect by force

Okay but what if I am in a situation like this does it really mean that there is nothing I can do to get back the money I have loan out to people ? Some people might decide to involve the police but I believe this may even be the best because police will be able to settle this and the debtor will be forced to pay it back.

 

[Good-Person]

What are the bad debts of the business? How bad debts occurs during operation of the business? And how these are treated in financial statements of the company?
Your knowledge is great and need suitable answer because I have to do it in financial statements.

Bad debts are bad for business and usually led to the bankruptcy of any business. The best way to avoid bad debts is to clear small debts because small debts may eventually add up and form bigger bad debts.

 

[Ghost1]

Debt must in every way be prevented. Some entrepreneurs most times would accept selling their products on credit to irresponsible buyers that wouldn't want to pay. This would put the business in jeopardy

 

[Seno inyang]

Bad debts is mostly involved in business owners who get loans from financial bodies to run their businesses and don't pay back on due dates.

 

[YERUS]

What are the bad debts of the business? How bad debts occurs during operation of the business? And how these are treated in financial statements of the company?
Your knowledge is great and need suitable answer because I have to do it in financial statements.

I think bad debts are debts that are owed by clients of a business.
There are even clients that would owe and get to forget that they actually do.
They are stated in financial statement as debts.

 

[Good-Person]

I always try to avoid bad debts and I always try to pay people instantly and avoid credit in order to avoid bad debts. Cash payments is the best way to avoid bad debts and this is the best policy many people have adapted to prevent debts.

 

[kinqzbitz]

Bad debts are actually very bad because it can bring down a business or company under one second because it will be close to impossible to actually get the money

 

[tyrim88]

Debt must in every way be prevented. Some entrepreneurs most times would accept selling their products on credit to irresponsible buyers that wouldn't want to pay. This would put the business in jeopardy

That is one of the things most entreprenuers face,especially if you are just starting the business venture.we had similar issue and experience when we newlly started our business,there was a lot of debt from customers,it really affected our business.

 

[eLdavis]

I always try to avoid bad debts and I always try to pay people instantly and avoid credit in order to avoid bad debts. Cash payments is the best way to avoid bad debts and this is the best policy many people have adapted to prevent debts.

Personally I think the reason why most persons fall Into bad debts in their business is cause they do not set a standard for themselves at the very beginning. They where trying to please customers, instead of laying these Laws down. What do you think?

 

[YERUS]

I have never incurred bad debts in my business. Bad debt could be incurred as a loan and they are surely a liability.
Bad debts can also come from the part of customers who are not able to make outright payments for goods and services obtained.

You are right.
Most business people incur bad debts as a result of customers not being able to pay up whenever they make purchases. Also, when business owners collect loans that are not eventually used wisely, it is difficult for them to repay.