Question
Cleanworks Services management have been actively pursuing clients who fail to pay invoices when they fall due. Based on the experience of Cleanworks Services in
Cleanworks Services management have been actively pursuing clients who fail to pay invoices when they fall due. Based on the experience of Cleanworks Services in this financial year which ends on June 30, 20% of clients (based on sales revenue) have not and cannot pay their invoices when they fall due. These clients typically close their businesses (especially with the overall reduction in business activity) and can never pay amounts due to Cleanworks Services. Identify the method and approach that is appropriate to account for bad debts in this case, justifying why the method and approach you have identified is appropriate.
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