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What can changes related to late payment of bill be categorized? What are External Failure Cost Appraisal ?
What can changes related to late payment of bill be categorized? What are External Failure Cost Appraisal ?
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Changes Related to Late Payment of Bills Categories Late payments can trigger a cascade of effects categorized into two main areas Financial Costs These are the most direct consequences and can include Late Fees A penalty charged by the creditor for missing the payment deadline Interest Charges Additional finance charges applied to the outstanding balance due to late payment Increased Minimum Payments Some creditors might raise the minimum payment required after a late payment Collection Fees Costs associated with debt collection efforts if the account goes delinquent NonFinancial Costs These can have a significant impact but are harder to quantify They may include Negative Credit Report Late payments can be reported to credit bureaus damaging your credit score and making it harder to access future loans or credit cards with favorable terms Service Disruption For utilities or subscriptions late payments might lead to service suspension or termination Damaged Relationships Late payments to vendors or suppliers can strain business relationships and make it difficult to secure future services Stress and Anxiety The burden of managing late payments can cause financial stress and anxiety External Failure Cost Appraisal External failure costs are expenses incurred due to product or service issues that reach the customer In the context of late payments these can be seen as the consequences for a company that fails to collect payments on time Heres how it applies Increased Administrative Costs The ...
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Management Accounting Information for Decision-Making and Strategy Execution
Authors: Anthony A. Atkinson, Robert S. Kaplan, Ella Mae Matsumura, S. Mark Young
6th Edition
137024975, 978-0137024971
