When an invoice is more than 90
days overdue businesses typically write it off as Uncollectible bad debt.
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As an example, let's assume that you have determined a total of
$1,000 in open customer invoices is Uncollectible.
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By using the allowance for doubtful accounts, you can quickly see how much of the
accounts receivable balance is deemed“Uncollectible”.
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While it is easy to identify an Uncollectible receivable as a recorded sale for which you will be
unable to recover the proceeds, there are several steps a business needs to take to get to that point.