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The process of trade begins when the goods or services are provided to customers on credit. The company profile transactions including the total amount and duration of loans creates an account. The bill will be recorded.
If payment is term receivables process ends there. However, often this is not the case. That’s when the billing department takes over. First, the customer is given the opportunity to explain the delay. If there is a complaint about a product or service, the case is sent to the relevant departments. When the issue is resolved and payment is received the process is completed. Sometimes the process will end if the product is shown to be faulty or expectations of the client, at which point the debt can be erased or reduced. This may or not be the case with your business or your company represent.
Some companies prefer to hire fee deadline outsourcing company. These companies take over the process of collecting overdue payments in a professional manner. A certain amount of fee or commission is charged for having completed the process of collection. In some extreme cases, customers will simply go bankrupt and can not pay in case the debt is transferred to the bad debts of accounts receivable.
The bad debts account will be recorded, but the company may or may not ever be able to collect on the debt. Some debts are lost causes, and the loss will be cut so that the system is not bogged down.
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