A small company that lost £5,000 in a year from bad debts gets advice on how to minimise the problem. 'Altamise' has £216,000 and 500 customers. Last year it lost £5,000 from bad debt. An advisor warns that the firm must show its customers it cares about recovering its debts. This business uses a debt-collecting agency to avoid wasting too much management time.
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- First broadcast:
- 6 June 2003
Find or construct a cash flow exercise in which a month's anticipated cash inflows fail to arrive due to bad debts. Get the students to work out the knock-on effects, perhaps even threatening the firm’s survival.