| The system of credit should improve life not worsen it. | | | | provisions for any such bad debts but these do bring |
| Walk down any street and you will walk by business | | | | down their net profit. Moreover, it does not reflect well |
| corporations that need revenues to exist. If there are | | | | in their accounts. Many individuals also are generous |
| no paying customers, businesses might as well close | | | | enough to loan money to their friends or others. |
| shop. | | | | Sooner or later you have to account for this money |
| This is bound to lead to problems for the business. In | | | | that was not received. It will have to be written off. |
| fact, the inability to receive payments may cause the | | | | The bad debt reflected in a company's year ending |
| business organization itself to have troubles meeting its | | | | statement makes life difficult for every board member. |
| own expenses. This may lead to bad debt which can | | | | It sometimes leads to all their hard work going |
| snowball into a major liability for the company. | | | | unnoticed. It is sad but true that sometimes only these |
| Individuals and businesses alike are susceptible to the | | | | lost payments manage to catch everyone's attention. |
| problem of bad money. | | | | Only some types of bad debts can be deducted from |
| The credit payment system came into existence | | | | tax whereas others are not exempted from it. |
| because at times it would be difficult to make large | | | | The only way in which a company can cut down on |
| payments. The system of paying by credit allowed the | | | | such expenses is by employing the services of a |
| dealer to continue doing business with customers who | | | | collection agent who can go from debtor to debtor to |
| he had a long standing relationship with and who were | | | | collect the pending payments. If the person is genuine |
| finding it difficult to make payments. | | | | trouble you may be able to locate them. If they |
| When services or products are offered on a credit | | | | intended to defraud you, they are probably in |
| basis, it is understood that the payment will be made at | | | | Switzerland by now! |
| a later date. However, as we all know, this does not | | | | In order to protect one from heavy losses, the seller or |
| always happen. People do suffer from financial crises | | | | dealer should always get an undersigning from the |
| at times. This makes it difficult for them to pay their bills | | | | customer stating that he will make the payment within |
| and debts. Sometimes the payment may never | | | | a stipulated period of time. Alternatively, the dealer |
| materialize, and the person who is to receive the | | | | could collect a retainer fee for the services are being |
| payment finds himself stuck with bad debt. Yet, even | | | | offered to the purchaser. Do not get too caught up |
| though the payment will never appear, the customer | | | | with the fact that the due date is in the past. That is |
| will have received the benefits of the purchase he had | | | | sad indeed. But maybe you can still make a payment |
| made. | | | | plan. A good plan will be realistic for the borrower and |
| Companies do plan ahead of time and make | | | | acceptable to the lender. |