Your bad debt is piling up faster than the revenue is coming in the front door. You are starting to wonder if doing business with the next customer is a greater risk to your company than closing the front door. There is so much potential revenue sitting in uncollected bad debt that if you could turn it into accounts receivable, your bottom line after expenses would look pretty good. At this point you may even worry about how you will look to the BBB.
With unemployment running high-in some states above 15 percent-many people, especially those without jobs, can’t help their situation. Likewise, businesses who were once trusted suppliers and business partners are now defaulting, leaving significant inventory or unfulfilled contracts that are now just liabilities or just more bad debt.
The current line of thinking for many companies, and this includes banks, is to write that bad debt off. Writing off the bad debt in manageable chunks means that your company can take a reasonable dosage of the pain pill each quarter if revenues can stay high enough to absorb expenses and the extra write offs. But this strategy assumes that revenues remain strong enough, perhaps hoping that the economy will recover soon enough to beef up any sagging bottom lines.
However, leaving so much potential revenue on the table seems like a bad idea. Yes, dealing with the magnitude of defaulting consumers is enormous in scale compared to the last decade’s collection numbers. Not many financial institutions or businesses were prepared to deal with the number of customers and business failures and then quickly execute a plan to resolve bad debt. This is where Cavalry Portfolio Services may be able to step in and help.
An alternative to the approach-writing off bad debt-came up on Linkedin as Cavalry Portfolio Services. This debt resolution company tackles the tough job of changing that bad debt into cash for your bottom line. They take the complaints form the BBB and they handle the legal jargon so that you can focus on growing your business again and stop worrying about the falling accounts receivable.