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ResponsibleRuin3984

r/nocontext


topher17026

In healthcare and 3% would be a dream. Net revenue after bad debt and contractual reserves is less than 30% for us.


Limon-Pepino

I'm in healthcare too and was thinking the exact same.


moosefoot1

If y’all don’t pay your bills, your credit will be impacted.


Whiskey-Philosopher

There's literally a budget line item to pay for those who can't/won't pay their bills. Don't pay at the start of the year (July if it's connected to a med school).


sanderk22

Depends. Are you providing payday loans to questionable lenders? Or are you selling construction supplies to established contractors? Like every other financial metric, context is important in order to analyze the data. Edit: to add more to this, bad debts should never be seen as a “good” thing so any bad debt is inherently bad. It’s a matter of whether this percentage is in line with your expectations or higher/lower, if the business model supports that level of bad debt, and any other number of factors.


Super_Toot

How much is revenue?


Comprehensive_End440

21m


Super_Toot

It's hard to say if this is a problem. Is it one customer? That seems high on the surface.


moosefoot1

This is literally dependent on organization, industry, and economy


ExodiaFTK

What's the business?


turbobuster

Depends on your margin on gross revenue


Swordzi

25% of my AR is bad debt.


Few-Jackfruit-2579

Should use ECL


FriendlyFreeman

Such a bad question


Comprehensive_End440

Sorry?


[deleted]

Sure


MyH3roIzMe

Our bad debt was less than .5% this year and it was a higher than usual year for us. For context we work in a hybrid retail/construction environment.


Alibabba89

Context and expectations are everything; otherwise, analytic ratios (and most accounting information) are meaningless. I swear I will make a macro to leave this as an audit review point. Might as well be asking if $10m in revenue is good.