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Bad Debt for the Last 12 Months
Bad debt expense, which is the amount that is written off in the income statement, represents the amount of non-collectable accounts receivable that occurs in a given period. Bad debt expenses occur as a result of a customer being unable to fulfill its obligation to pay an outstanding debt, due to bankruptcy or other financial problems. The impact on net income can be considerable, and therefore it is important to have a metric to follow up the evolution of the bad debt expenses. The goal can vary by industry, but the ultimate goal is to have no or as little as possible write-offs on receivables. Actions to remedy this situation include the following:
Better customer approvals processes
Credit policies
Credit control
The calculation of the percentage of net sales is:
(Bad Debt Expenses / Net Sales) * 100
Note: The data source is the GL Report Line Fact fact table, which retrieves data from the EE GL Balance fact table. An Excel spreadsheet is used to define the GL account ranges for each reporting line such as bad debt expenses or net sales. For further details, see the user documentation on the CFO dashboard.
The Bad Debt for the Last 12 Months chart shows the bad debt expenses as a percentage of net sales, month by month, over the last 12 months.

Bad Debts for the Last 12 Months Chart