Bad Debtors

What is Bad Debtors?

"Business accounts receivable that have been included in income that are uncollectible, legally binding debts owed to you that are uncollectible, and debts you must pay that you guaranteed in connection with your business or for a profit may be deductible as bad debts."

So the story begins here. There are times business relationship has to be put aside when money is owed and unpaid to us over a certain period of time. Sending a 'Notice of Demand' from the lawyers will be the last resort and that isn't what we really wanted if we intend to prolong our business relationship. Unfortunately that isn't the story.

Furthermore if the clients intend to deviate to other suppliers from us, we should be informed of non business activity with us and not mis-informing us of more future jobs. This will in hand gives us the idea that there will be more business opportunity and we had invested in materials which are to cater for our clients needs. End of the day this is operating cost which we should not bare as well.