What’s the Impact of an un-collected Bad Debt?
Most people don’t realise the vast effect an uncollected debt could have on their business. So please take the following scenario as an example and then click below on the calculator to figure out if your business is in danger as well…
1: Consider the cost in connection with your Net Profit Margin!
2: Most Businesses operate near a 10% Net Profit Margin.
3: ADD the spent and unpaid materials; labour; mark up & overheads.
|Materials & Labour – Outlaid and Unpaid||–$1500.00|
|33% Mark Up – Unpaid||– $1650.00|
|Overheads – Outlaid and Unpaid||– $698.00|
|NET PROFIT @ 10% LOST PROFIT||$500.00|
$500 un-collected net profit x 10 = $5000 (value of the original debt )
10 new sales @ $5000.00 are needed to bring you back to break-even point. And you do it working for nothing!
Extra Sales Needed $50,000.00 to make up your lost / un-collected net profit.
Plus the original unpaid Materials / Labour / Overheads @ $2198.00 + the original lost mark-up/lost profit @ $2150.00
*The table is for analogy purpose only and represents a possible scenario which would be common for most businesses.
Want To Do Your Own Calculation?
Click on the calculator below and find out if or how much bad debt is affecting your business.
Can You Afford This?
“10 Proven Ways
To Avoid BAD DEBT!”
Bad Debt is inevitable in a growing business and some say if you don’t have bad debt you are not taking enough risk to increase your business. This guide will help you manage your Accounts Payable. Simply click the button below and follow the instructions to download this report totally FREE.
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