How Does AR Performance Impact Bad Debt Write-offs?

Accounts Receivable (AR) performance directly influences Bad Debt Write-offs by determining the effectiveness of credit management and collections efforts. Efficient AR management, including timely invoicing and proactive collections, reduces the likelihood of unpaid invoices and lowers the need for write-offs. Conversely, poor AR performance, such as high levels of overdue balances and slow collections, increases the risk of bad debt and necessitates higher write-off amounts.

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