(the invoices that you don’t ever receive payment for, and have to write off) of 1% you would need to bring in an additional £50k in revenue to compensate.
With the same turnover of £1m, a contribution of 10% and a payment loss
of 2%, you would need to bring in a staggering additional £200k in sales to compensate your loss.
Can you afford to write off those bad debts? Can you achieve the additional sales you need to compensate for the loss?
Effective credit management processes are essential to keep your
business on track.