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I’m driven by the challenge to build great businesses with great people to solve real…
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Great breakdown nathan. And this still assumes every dollar invoiced is actually collected.
At even a modest 5% bad debt rate, the impact is not simply 5% less profit. The product has already been produced and delivered, and many of the costs and taxes have already been incurred.
Using this example, that $4.05 of take-home could fall closer to $1–$2.
Noncollection is effectively another tax on an already razor-thin margin.
So more critical than ever to implement a proper credit and collection policy if you are extending terms today.
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