Getting rid of bad debt, or more prominently, writing it off is often required by businesses who have customers that can’t pay their bills. Having customers owe money to your business, can be potentially extremely harmful to your business and might force you to have it written off entirely.
Bad debt thus generally refers to a situation where an individual has bought products, or rendered services, from a company, on credit, but isn’t able to pay it back, according to the instalments that are set up by the company.
Bad debt is an awful thing for a business, especially one starting out, to have. That is because bad debt cannot be collected, making it next to impossible to generate it out of a pocket other than your own.
How to Deal with Bad Debt
Although it is difficult to solve the problem at hand, when it comes to bad debt, there are a few ways one can solve it.
Businesses can incur bad debt by offering loans to their clients and vendors, take out a business loan to pay it back without hurting their company, as well as by reducing credit sales to customers, to help the problem from increasing with more customers.
By reducing a business’ credit, for instance, businesses have a far better change managing their customers and the credit they can afford than they would if they only allowed them continuously increased credit.
How a Business Can Write Off Bad Debt
Regarding financial accounting, bad debt, if not paid by customers, becomes an expense for businesses, which when it comes to accounting, can be very time-consuming and turn out to be quite expensive.
When it comes to accrual accounting in business, payments get marked as receivable accounts and are receivable as money owed to the business.
If this money isn’t paid, according to its scheduled instalments, or after that after negotiating payment terms with the customer, it becomes a bad debt that needs to be written off. It means the business’ accounting books need to be readjusted, to be able to represent the actual amounts of the business credit accounts.
Since writing off bad debt includes removing it altogether, it will affect your business balance sheet. It can either be written off with an allowance method, or direct write-off method.
Writing off Bad Debt
This method allows you not to predict the payment that is receivable for credit sales, which is that owed by all your customers. It results in debiting all bad debts, expenses, as well as credit allowance, for accounts you’re uncertain of. In the case of bad debt, you’ll be able to credit your receivable accounts, as well as your debit allowance for those accounts.
Direct Write-Off Method
This method is most commonly used to write off bad debt and takes place after receivable accounts get recorded, which must be credited as receivable accounts, where bad debt expenses must be debited, to be able to write it off completely
E-commerce has been an innovative marketing platform that’s been around for a while, but why is technology only having a major effect on it now?
Well, that’s because shopping in a store, or online in a manner that is either not well thought out, or difficult, is something entirely of the past.
E-commerce is a platform for making sales at both a small or large scale, that allows customers to buy items online, help customers to keep track of their purchases, as well as when they’ll receive it.
It also allows for a lot more support from the brand, or company, you’re buying from, which is something that wasn’t exactly possible in the past. In fact, shopping online a decade ago was a lot more complicated than people think. What’s more is, it was very safe either.
E-commerce Stores for the Online World
Online users use to be quite wary about buying items online, especially if those items would have to be shipped abroad, with the hope that it wouldn’t get lost, and, arrive according to schedule in one piece.
Technology has thus had a major effect on the industry of e-commerce and how retailers converse and sell to their customers.
This shift in technology has allowed for business-to-consumer transactions, fresh opportunities, as well as access to the tools that will enable consumers to look at prices, compare products or services, as well as locate stores more effectively and even make use of discounts.
Due to the effectiveness of online e-commerce stores, anyone, from anywhere in the world, can now purchase any brand’s products and have it shipped to there doorstep with a few clicks of a button. It has also allowed retailers to make greater sales, create a more reliable platform for dealing with customers, as well as promote stronger B2C relationships, which finally, helps brands grow faster.
Technology has thus revolutionised the way businesses connect with their consumers and have amplified the process of making a sale.
E-commerce for Retailers
If you’re a retailer, enjoying the wonderful perks of having an e-commerce store online, you’re on your way to growing your business and reaching a global network of consumers, which wouldn’t have been possible otherwise.
Dozens of features and application software has also allowed for marketing to be made more accessible, allowing for products to be more accessible than ever before.
A marketing technique, such as social media marketing, which is generally connected to your e-commerce store, can allow for a global platform of online users, looking to purchase products from your store.
E-commerce, along with the enhancements of technology, has allowed for a lot of success in businesses globally. Most brands owe their success to the incredibly well-paired e-commerce, digital marketing platforms, and of course, the internet.
Change takes place consistently, making wellbeing an active process. We all have suffered illness or had times of good health. Most people had times of serious illness. Lifestyle changes can alter our levels of fitness. What does it mean to be fit? Physical health is essential, but so is mental health as well.
There are different areas where we need to be healthy and in good physical condition. These areas include Physical health, Mental health, Emotional health, Spiritual health and Social health.
Physical Health involves lifestyle improvements that will cause fewer diseases and illness. Fitness includes heart and lung abilities and the capability of your body to breathe oxygen. The oxygen is then delivered to the cells in your body to improve circulation by releasing energy so that physical activities can take place.
Physical health also includes the capability of your muscular endurance, strength and the generating of power to improve posture in our bodies. Our muscles and joints consist of the range of movements that we can perform.
Mental Health is the potential to grow in knowledge and learning how to grow intelligently. We determine good mental health by factors such as circumstances and structures in our lives like parenting, schooling and the relationships that form during our lives.
Emotional health is a term that refers to the capacity to control our emotions, learning to express them freely and effectively.
Spiritual health states the type of faith we have. Is our faith focused on belief systems or in some unifying force?
Social health indicates our ability to sustain relationships, including our participation in events and the people in our environment.
We need to take responsibility for our wellness and development. Every person on earth desires a good quality of life with personal growth. We can all improve our health to live long lives. Taking care to eat nutritious foods, doing regular physical exercises, learning to cope with stress and maintain good relationships will only improve our wellbeing. We should work towards being well in soul, spirit and body. If any imbalance occurs, we will be unfit. We must take care of ourselves. There are fitness professionals to assist in motivating us to improve our overall level of health continually. Guidance and support are available. We need to drive ourselves to become more physically active and encourage one another daily to have a proper diet.
There are fun activities that families can get involved in to benefit their overall health. One would be to do bike riding or rollerblading. Playing on the beach will reduce stress and help you lose weight at the same time. Physical activity makes you live longer and improves overall fitness. Your health and the proper shape of your family is too important to ignore.