{"id":313,"date":"2019-11-07T11:46:03","date_gmt":"2019-11-07T11:46:03","guid":{"rendered":"http:\/\/churchillrecoverysolutions.co.uk\/blog\/?p=313"},"modified":"2019-11-07T11:46:03","modified_gmt":"2019-11-07T11:46:03","slug":"what-is-the-difference-between-bad-debt-and-doubtful-debt","status":"publish","type":"post","link":"https:\/\/churchillrecoverysolutions.co.uk\/blog\/what-is-the-difference-between-bad-debt-and-doubtful-debt\/","title":{"rendered":"What is the difference between bad debt and doubtful debt?"},"content":{"rendered":"<p><strong>Knowing the difference between bad debt and doubtful debt can help to prevent financial loss to your business.<\/strong><\/p>\n<p>Today\u2019s uncertain economic climate is having a negative effect on UK business payment practices, with a recent study finding that 35% of invoices remain overdue on their due date.<\/p>\n<p>Late or non-payment of an invoice is an unpleasant problem that all businesses are likely to face at some point.<\/p>\n<p>If you\u2019re struggling to collect a debt, it\u2019s important not to write it off as a bad debt too early. Here\u2019s a quick guide to recognising the differences between bad and doubtful debts.<\/p>\n<p><strong>Bad Debt<\/strong><\/p>\n<p>Bad debts, sometimes referred to as irrecoverable debts, are debts that a business is definitely unable to collect. In accounting terms, these debts are written off as expenses.<\/p>\n<p>A debt doesn\u2019t become a bad debt until a company has exhausted every possible effort to seek payment.<\/p>\n<p>Examples of situations where a debt may be deemed as bad include:<\/p>\n<ul>\n<li>Customer declares bankruptcy.<\/li>\n<li>Chasing the debt costs more than the debt itself is worth.<\/li>\n<\/ul>\n<p><strong>Doubtful debt<\/strong><\/p>\n<p>Debts should only be written off as being bad if there is certainty that it will be impossible to ever collect them. If there is still a chance that a debt may be collected in the future it should be recorded as a doubtful debt. In accounting terms, doubtful debts are recorded as both a credit and a debit so that they can be revised in the future.<\/p>\n<p>Examples of situations where a debt may be deemed as doubtful include:<\/p>\n<ul>\n<li>A supplier is causing a delay.<\/li>\n<li>There is a customer dispute.<\/li>\n<li>Customer is experiencing financial difficulties.<\/li>\n<\/ul>\n<p>Here at Churchill Recovery Solutions, we provide a variety of effective, affordable and ethical debt collection services to help businesses to recover the money that they are owed.<\/p>\n<p><strong>Before writing off a debt, speak to our team of experts for help and advice by giving us a call on 0333 320 0748.<\/strong><\/p>\n<p>&nbsp;<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Knowing the difference between bad debt and doubtful debt can help to prevent financial loss to your business. Today\u2019s uncertain economic climate is having a negative effect on UK business payment practices, with a recent study finding that 35% of invoices remain overdue on their due date. Late or non-payment of an invoice is an [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[4,28,3,76,45,52,46,62,32,77,113,47,132,23,59],"tags":[75,73,14,68,8,86,93,9,10,87,170,24,25,72],"class_list":["post-313","post","type-post","status-publish","format-standard","hentry","category-avoiding-debt","category-business-debt","category-churchill-recovery","category-debt-collection","category-debt-collection-agencies","category-debt-collection-company","category-debt-recovery","category-debt-recovery-processes","category-debtor","category-late-payment","category-late-payment-law","category-recover-your-debts","category-recovering-debt","category-small-businesses","category-smes","tag-business-debt","tag-ccj","tag-ccj-difficulties","tag-churchill-recovery","tag-debt-collection","tag-debt-collection-agencies","tag-debt-collection-company","tag-debt-collection-procedures","tag-debt-collection-tips","tag-debt-recovery","tag-doubtful-debt","tag-late-payment","tag-reduce-late-payment","tag-small-businesses"],"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/churchillrecoverysolutions.co.uk\/blog\/wp-json\/wp\/v2\/posts\/313","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/churchillrecoverysolutions.co.uk\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/churchillrecoverysolutions.co.uk\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/churchillrecoverysolutions.co.uk\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/churchillrecoverysolutions.co.uk\/blog\/wp-json\/wp\/v2\/comments?post=313"}],"version-history":[{"count":1,"href":"https:\/\/churchillrecoverysolutions.co.uk\/blog\/wp-json\/wp\/v2\/posts\/313\/revisions"}],"predecessor-version":[{"id":314,"href":"https:\/\/churchillrecoverysolutions.co.uk\/blog\/wp-json\/wp\/v2\/posts\/313\/revisions\/314"}],"wp:attachment":[{"href":"https:\/\/churchillrecoverysolutions.co.uk\/blog\/wp-json\/wp\/v2\/media?parent=313"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/churchillrecoverysolutions.co.uk\/blog\/wp-json\/wp\/v2\/categories?post=313"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/churchillrecoverysolutions.co.uk\/blog\/wp-json\/wp\/v2\/tags?post=313"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}