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How can we avoid bad debts for the rest of this calendar year?

Answer: You can’t prevent bad debt losses. Even if you stopped selling starting today, a certain amount of the balance due would not be collectable. Your goal should be to manage credit risk and to hold losses to acceptable levels. Anecdotally, I know of one credit manager of company generating sales in excess of $1 billion per year who told me that his net bad debt write offs for the last three years had been zero. A few months later, he was fired for – you probably already guessed – refusing to take enough risk and by doing so turning away business that his former employer wanted.

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