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

[Dowenship]

It is very important for newly established business to avoid bad debt at all cost
Bad debt can have a detrimental impact on a business, putting its survival at serious risk. Majority of startups will face financial challenges at the early stage in business and that can lead to early closure of once promising business.

what is the best way to reduce bad debt?

If majority of startup have to face financial challenges at there early stage in business we wouldn't have some successful companies or business we have today...

 

[Smithkid]

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HomeArticlesArticles about Advice for DirectorsWhat is a bad business debt and how can I avoid them?
Updated: 5th March 2021
What is a bad business debt and how can I avoid them?
If your business incurs a bad debt it means one of your customers hasn’t paid for the service or product provided, and you’re unable to collect the money. Essentially, this sum is lost and needs to be written off in your books.

Failing to deal with frequent or high levels of bad debt can cause your business to decline, and suggests changes need to be made to credit control and credit management procedures.

How bad debt can affect your business
Bad debts can adversely affect your business in a number of ways, including:

Reducing the amount of cash available to run the business day-to-day
Compromising your ability to pay your own creditors
Conveying a business image of disarray or disorganisation to the business community in general, but in particular to your staff and customers
Negatively affecting plans for growth
Introducing the threat of insolvency if bad debt levels are high

 

[nimzy]

what I believe in business is that know friends in business when it's time for business we do business when it's for pleasure we go to pleasure.

 

[Adebola]

Debts are really a disadvantages in business. It makes it difficult to know the actual worth or revenue of your business. This can come as a results of mismanagent

 

[Damscooguns73]

Concerning how have I been able to avoid bad debts in business. Well, when it comes to the financial aspects in a business especially for those who just brought or started a business, it is best to avoid debts either small or big. You have to make your terms and conditions very clear to your customers, once they don't have your money at hand, you have to drop a valuable item that is worth the goods, products or rendered services as collateral.

 

[Kelly5]

You should have something lije credit score checker fornyour customers. Custmers that are worthy of such credit should be the ones you give credits to avoid tiomuch bad debts

 

[Ayokex]

Avoiding bad debt in my business is what I've taken very seriously because understand it's detrimental effect on the business. I make sure that whatever debt I'm to incurr on my business is the one that is capable of yielding more profit.

 

[Carson20t]

Technically if a business is always scaling up on production and sales then it means its casflow is good but you need to maintain the casflow with profits.So whether its a starting business or already existing the factors have to be put into perspective and weigh the options as to whether its worth it to contract debt.Its mostly adviced not to contract debt when a business is a start up in my opinion.

 

[Kelly5]

In enlisting what type of customers are qualified to get credit from you, you should not include newer customers to the list, they must be customers you have come to know over time of transacting with you

 

[joy101]

For a business to be improving and growing you must avoid debt in your business, mention that you not sell your product on credit and work hard in your business.

 

[Setfragil]

There is no way in any business that you will not record bad debts. The best way to avoid bad debts in business is to give what you know will not affects the records of the business much or not sell goods to people without payments.

 

[Adebola]

Debt in business is a very bad thing because it is capable of closing down the business if not resolved on time. To avoid that always try to handle as much as you are capable of

 

[Ronald03]

Its hard to avoid bad debt in business ,because there are times that the customers you trust would keep promising ,giving you hope of repaying the debt

 

[Ayokex]

Indeed, I think it is important that businesses maintain a good financial portfolio. However, there are some debts incurred that can be referred to as good debt. The bad debts usually come with low patronage and loss of revenue

Debt is not a palatable thing especially for business. Some businesses have rundown due to accumulation of debts. I o avoid bad debts in business creation ensure that whatever you want to incur a debt on is something that will add more value to the business and bring more profit.

 

[Senator]

Though one cannot outrightly avoid bad debts in a business at all times. But we can minimize it to a certain level from becoming a reoccurrence too many. Only give to people you are very familiar with in your business that have a very high credit level in your books

 

[alberello75]

In my opinion, perhaps among the first things it would be to choose the right moment and start the right business for that moment.
Then avoid loans that are too high and too long over time, because however we are not 100% sure of how things will go "tomorrow".
And then, there are further factors ...

 

[Cash%]

In order to reduce debt, most business owners need to be honest with themselves. You need to start small and then grow. Most want to start from the top that's why they take loans.

They think by taking loans it would expand the business to the way they want it ,that is the reason they choose on borrowing loan to get more profit and interest

 

[Richard92]

Set reasonable credit limits
Setting a sensible credit limit for new clients limits misfortunes through terrible obligation. Credit cutoff points can generally be expanded when another client shows their unwavering quality, and you're glad to broaden their terms.

You can be able to manage risks in a business by limiting unnecessary spending and also insuring your business this is another way of handling risk.

 

[Ayokex]

Set reasonable credit limits
Setting a sensible credit limit for new clients limits misfortunes through terrible obligation. Credit cutoff points can generally be expanded when another client shows their unwavering quality, and you're glad to broaden their terms.

Bad debt is a plague that should be strictly avoided in every business. There is not point in incurring unreasonable debt that doesn't add any value to the business. Such a debt will eventually kill the business on a long run.

 

[Pousinha]

First of all, I strictly avoid to borrow money. As all entrepreneurs, I have by law the right of borrowing money from banks without being bound to any written guarantee. In any way, I prefer by far to go on without loans. As my activity is 100% digital technology media based, I could have asked for a loan to buy a very powerful PC, as such devices in my country cost between 7000 and 45000 and more reais. I could have asked a loan to buy, for ex., one of 15000, but I preferred to stick with my old stuff and the purchasing of a 2800 reais new netbook. What about if I took a 15000 reais loan and then can't pay off it? Coronavirus is making things harder for entrepreneurs and I see I'm not earning enough as entrepreneur teacher to take such a loan.