What procedures can a company implement to reduce bad debt expense?
Bad debt expense is incurred when a company can collect cash or payment from customers who purchased on credit. There are two ways that a company can reduce this risk.
First off, they can perform credit checks on all new customers. Secondly, the company can require new customers to use credit cards. Once the company has experience with the customer, they can determine whether to allow them to purchase on credit and what is the max credit that is allowed.
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