How have you been able to avoid bad debt in business?

[Kaffyfolla]

Implement strict collection procedures is one of the way to avoid bad debt in business ​

Let your customers know how serious you are when it comes to collection. This way, they will prioritize you over other creditors. Some of the activities you can do to ensure you’re in front of your customers’ minds are:

• Sending them follow-ups before, during, and after their payment schedules through appropriate channels.
• Sending accurate invoices as soon as possible.
• Put transactions on-hold. Stop supplying to customers who haven’t paid their dues yet or have exceeded their credit limit.
• Offer incentives to outstanding payers to encourage them to pay on time. It can be a small discount or cashback.

 

[Kvngsammy]

One way to reduce bad debt is to differentiate family from business, personal needs from same and have standards that you don't compromise for anyone.
My mum always did this when my sister was at home in her shop and it was wonderfully well, they'll be disappointed at first but you're saving the life of your business.

 

[Skysaint]

This is why it's always necessary to consider the maintenance cost of your business when working to raise the business startup capital. Businesses in its infancy stage is prone to face a lot of financial challenges and if you're not well prepared for it could become very detrimental

 

[Ghost1]

This is why I always say, if it's not important don't spend on it. Bad debt is usually due to overspending. Some Entrepreneurs buys things that won't add value to their business, they even go along way to borrow so as it buy these things

 

[Bousine123]

It is not easy to avoid bad debt as some people will always come to collect goods on debt you have to keep your policy of not accepting bad debt that is just I do avoid bad debt in my business

 

[Ub40]

I know that bad debt refers to loans or outstanding balances owed that cannot be recovered and must be written off. And it is as a result of doing business on credit with customers. At times you may be forced against your will to sell on credit due to the fact that the item has stayed so long with you and may be difficult to sell it. Or there are some extra gain in selling it on credit.

 

[Immilash1]

At the first place you don't need to take any loans while starting a business this my best way to avoid bad debt.You can act this by dicipline yourself.

 

[Lucy ID]

There are different ways to avoid bad depth in businesses especially new ones, first avoid giving your goods and services on credit, avoid spending wrongly, be disciplined and diligent with everything that has to do with your business

 

[Laurentta]

The first way to avoid bad bebt in a business is to avoid being in debt. Also try to manage company resources and cut down cost.

 

[greenie]

Once you know the financial capacity of the business nothing should make you incure debt on the business. You wouldn't want to go beyond the capability of the business because if you do the the debt will set in and this not good for the sustainability of the business.

 

[Sotherefore]

At the first place you don't need to take any loans while starting a business this my best way to avoid bad debt.You can act this by dicipline yourself.

I always try to avoid this because to me I believe it is not really necessary , people can just organise their life to start up the type of business they are interested but some people without proper understanding will believe that getting a loan to start up something is The Only Way out.

 

[Shigobad20201]

Implement strict collection procedures is one of the way to avoid bad debt in business ​

Let your customers know how serious you are when it comes to collection. This way, they will prioritize you over other creditors. Some of the activities you can do to ensure you’re in front of your customers’ minds are:

• Sending them follow-ups before, during, and after their payment schedules through appropriate channels.
• Sending accurate invoices as soon as possible.
• Put transactions on-hold. Stop supplying to customers who haven’t paid their dues yet or have exceeded their credit limit.
• Offer incentives to outstanding payers to encourage them to pay on time. It can be a small discount or cashback.

You just gave a detailed explanation on how to collect debt back from customer, first step is to always send them reminder messages reminding them of their debt and the day of payment, and if you realise they don't pay after the stipulated time, you stop supplying them to stop further debt,

 

[ganibade]

To avoid bad debt in business is important to newly or stayed businesses. This can be avoided in order to make good income. It is good to start a business with a little resources on grand than to go for bad debt.

 

[Immilash1]

I always try to avoid this because to me I believe it is not really necessary , people can just organise their life to start up the type of business they are interested but some people without proper understanding will believe that getting a loan to start up something is The Only Way out.

Taking loans to start up a business might the only way out in some critical situations but is not encouraging to take loans in other to start up a business.

 

[Godspower]

Taking loans to start up a business might the only way out in some critical situations but is not encouraging to take loans in other to start up a business.

Even if you must take loans, avoid taking loans from banks and other financial institutions who always charge high intensity rates. It is better to borrow from friends and relatives who will understand your plight.

 

[Sotherefore]

Taking loans to start up a business might the only way out in some critical situations but is not encouraging to take loans in other to start up a business.

In some critical condition like how, do you really think it is absolutely necessary for any reason for someone to take a loan and start up a business ? I can't even imagine a situation that will require a loan to start a business ,except you can mention one.

 

[Immilash1]

Even if you must take loans, avoid taking loans from banks and other financial institutions who always charge high intensity rates. It is better to borrow from friends and relatives who will understand your plight.

True. Thanking loans from banks are risky that's why it's always advisable to take loans from people that won't put much pressure on you.

 

[Swazykid4all]

The best way to reduce bad debt is to ensure your possible best not to be in debt at all. Once a business starts owning people or financial institutions, there's a probability that that business might gradually slip into bad debt if care is not taken. I know it can be hard for businesses especially startups not to be in debt but all business should have a Debt management team to for stall slipping into bad debt.

 

[Godspower]

True. Thanking loans from banks are risky that's why it's always advisable to take loans from people that won't put much pressure on you.

As funny as it may sound, but most of these banks really hope the debtors are unable to pay up on time so that they charge high interests on the amount collected.

 

[mayumi97]

Bad debt occurs when your customer is unable to pay the amount due the business. This can happen when the business extends credit terms to its customers in its desire to increase sales. Extending credit can put pressure on the cash flows of a startup business. When receivables are not collected as expected, this could have serious repercussions on the company's operational efficiency and financial capacity. As much as possible, it should operate on a cash only basis. If giving credit terms is unavoidable, the company should be proactive in the collection of its receivables. It should conduct credit investigation and grant credits only to those who have the capacity to pay.​