How to turn write-off into revenue and support the bottom-line

Whether a company’s provisioned debt is based on historic performance or risk analysis – it is still an estimate and there is always an opportunity for upside. Already written off on the balance sheet, collecting out on these “at risk” accounts can create upside which can support the bottom-line and a potential hero out of the person who actioned it.

image of man with graph showing upside driven through provisioned debt

All businesses which operate on open credit will make a provision for bad debt.  A reserve against the risk of certain accounts receivable being uncollectible, it is calculated using general and specific allowances. A general allowance is a calculated as a percentage of total accounts receivables – based on the business’ historic experience. A specific allowance includes individual accounts which have been identified as a bad debt risk – either by knowledge of the business’ financial health or through aged debtor analysis.

Whichever way your business’ provisioned debt is calculated, there will always be an element of estimation. Whether using historic figures or risk analysis based on the decreasing collectability of ageing debts – unless a business has ceased to trade there can still be the potential to collect. And if there is one thing worse than keeping a balance on your ledger too long, it is writing off a balance which is collectable!

If inhouse efforts have proven unsuccessful, bringing in an outsourced debt collection provider at this point can be a game changer. You might pay a percentage for an external party to work these provisioned files, but 80% of something is better than 100% of nothing – particularly when it is all upside to the bottom-line.

As these files belong to defunct customers, the common push backs to outsourced debt collection can often be overcome. Fears over the impact to ongoing customer relationships become null and void when the customer has ceased to trade with you. Provisioned debt can be a good toe-in-the water trial for businesses who have identified a need for outsourced debt collection but are still struggling to make the leap. It can provide a low-risk look at the effectiveness of your potential outsourced partners systems and processes – and ultimately whether they are a good fit for your business.

Author: Mark Smith

If your business would like to access the potential revenue in your provisioned debt, 4D Contact can help. We have extensive experience in finding additional revenues in ledgers which have been previously worked by both internal and external collection teams - helping finance teams reduce BDA, increase working capital and support the bottom-line. Contact us now at: or on 020 37691487 / 07885 936914


Interested in receiving more news and views from 4D Contact?

Subscribe to our weekly newsletter

You may be interested in these other recent articles

Common pitfalls when outsourcing accounts receivables.

3 June 2024

Some of the common pitfalls businesses experience when centralising or outsourcing cash collection - and how to avoid them.

Read more

7 factors critical for successful invoice-to-cash centralisation or outsourcing

14 May 2024

Investing in a shared service centre or moving your invoice-to-cash process to an outsourced partner does not automatically guarantee cost efficiencies and an improvement in…

Read more

Key Benefits of Cash Collection Centralisation

18 April 2024

Cash collection is one of the finance functions which can see huge benefits from centralization.  Highly process driven, it is a function for which technological transformation…

Read more

Key tips for successful credit-control outsourcing.

13 March 2024

Are you a finance leader looking to streamline your credit control function? Outsourcing this task can be a game-changer for your business. Outlined in this…

Read more

With results-driven customer contact being their primary, not secondary, function, 4D Contact produced an increase in performance of 81% during the pilot project, as well as improving interaction with our valued customers.

Due to this success we have engaged with 4D Contact on a permanent basis and extended the remit to include Ireland as well as the UK.

Richard Clow

Head of Consulting, Schindler UK

Book a consultation

Discover the benefits your business could achieve with a bespoke, outsourced contact solution.

Our brief consultations are designed to outline the impact your organisation could achieve, whatever your starting point and unique requirements.

    Register to receive updates

    Enter your email to receive regular news and updates.

      Our contact details

      4D Contact: London

      Barratt Smith Brown & 4D Contact
      Bentinck House
      3-8 Bolsover Street
      W1W 6AB

      4D Contact: Malaga

      Four D Contact S.L.
      Camino de las Cañadas 1D
      Centro de Negocios Martín Buendía
      Planta 1ª, Oficina 17
      29651 Mijas Costa
      Málaga, Spain

      4D Contact: Dublin

      The Black Church
      St Mary’s Place
      D07 P4AX

      Global Sales Enquiries:

      © 2024 4D Contact. All rights reserved  |  Privacy  |  Complaints policy
      Registered in Ireland, number 626576  |   Website credit