One of the worst things that can happen in any business – is to get burned by a customer that doesn’t pay. If you’ve been in business long enough, chances are that a customer of yours will end up stiffing you on a project one day. Companies in the U.S. write-off an average of 4% of their accounts receivable every year. That number doesn’t even include the larger accounts they have to spend money for attorney fees and debt collection services just to recoup. And write-offs don’t just happen during an economic downturn. Quite the opposite in fact – it’s very common for companies to get overextended during a period of fast growth.
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