Bad Debt Bankruptcy Deductions 
Your Virtual Credit Manager
JANUARY 14, 2025
The United States has witnessed a significant surge in corporate bankruptcies, reaching a 14-year high in 2024. Business bankruptcy filings increased by 33.5% The Customer Delinquency Challenge Successful accounts receivable (AR) management involves minimizing past due balances to ensure steady cash in-flows and limit bad debt losses.
Your Virtual Credit Manager
MARCH 4, 2025
Based on this industry outlook, there was staff performing collections and deduction resolution, but no credit function. This company was fortunate to avoid significant bad debt loss until Ames Department Stores, Kmart, and Fleming Foods (a distributor) all filed bankruptcy within the same year.
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Your Virtual Credit Manager
MARCH 21, 2023
In addition to the effect of inflation, AR loses value as a result of profit dilution (when customers do not pay you the full invoice value due to payment deductions or disputes) and bad debt losses. The role of credit should not be focused on preventing bad debt losses, but rather maximizing profits.
Your Virtual Credit Manager
SEPTEMBER 12, 2023
To make matters worse, invoice errors also tend to generate payment deductions (partial payments). Correcting invoices and reconciling payment deductions are essentially rework: work that is not necessary if you got it right the first time. To make matters worse, most payment posting errors will involve deductions.
Your Virtual Credit Manager
JUNE 13, 2023
These bad debt losses can put your own business at risk of failure. Subscribe now The Increasing Risk of a Growing Number of Defaults Commercial bankruptcies began rising late last year after the historic lows of 2020 and 2021. Far more damaging is a customer that defaults (never pays).
Your Virtual Credit Manager
SEPTEMBER 19, 2023
Commercial bankruptcies have been trending upward for most of this year, so it is likely some of your customers are in a downward spiral, if it has not yet shown up in their payment pattern. From this conversation, you will learn how perilous the bad debt risk is with this customer, and how urgent your reaction must be.
TreviPay
SEPTEMBER 18, 2024
Exclusions: Common exclusions include pre-existing bad debts, disputes between buyer and seller and non-payment arising from unresolved contractual disagreements. Deductibles: Some policies include deductibles, meaning the business must absorb part of the loss before the insurer covers the remainder.
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