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llect, bad debts occur when you provide products or services on credit. While some customers just need more time to pay, others (hopefully a small number!) never will, and the income from the sale is never realized.

DEBT FINANCING

The Advantage of issuing long term debt include:

1. Interest is tax deductible, while dividend are not

2. Bondholder do not participate in superior earning of the firm.

3. The repayment of debt is in cheaper dollars during inflation.

4. There is no dilution of company control.

5. Financing flexibility can be achieved by including a call provision in the bond indenture a call provision allows the company to pay the debt before the expiration date of the bond

REASONS OF BAD DEBTS

After research work we have found the following reasons, when banks rented its uncollectible receivables into debts such as

· Parties is also to pay but not willing to pay

· Weak financing position of the borrower

· Political factors involved, political situation of the country at that time period is suitable to the borrower to repay the loan.

· Management set up of the organization is disturbed.

· Acceptance of weak securities like joint property, illegal property

· Defective documentation

· Documentation subjects to limitation law.

· Improper follow up for recovery by the banks where borrower has expired

· Natural climate

· Suspension of transaction/turnover in running finance accounts for at least three months.

· Default in payment of three consecutive instalment.

· No movement in pledged stocks for at least period of three months.

· Short fall in drawing power for any reasons.

HOW TO MINIMIZE THE BAD DEBTS

TECHNIQUE/METHOD OF RECOVERY

It is for each one to know/take such steps for making recovery, the results which are good and that would be that be method for him. It is the spirit, intention, honesty, and sincerity towards the work which count and bring fruitful results. There is saying, ‘if you forget the borrower is not going to remember, once the accounts have shown/developed a symptom of becoming difficult YOU HAVE TO WORRY ABOUT COLLECTING because now you are stuck with them. While a rigid parameter cannot be laid down for making recovery, the following guideline would prove useful.

Resume AND REGISTER OF STUCK UP ADVANCES

A resume on such accounts on the standard form compiled and registered maintained so as to have detailed information and record of the progress/efforts made. Any individual should be assigned the responsibility for keeping/recording the same. Reviewing these resume very often is an important part of reasonability. On the contrary, they usually become larger ands more serious with the passage of time. Therefore, it is absolutely essential to identify them early and to start worrying about them early. The difficulty of recovery increases in direct proportion本论文由英语论文网提供整理，提供论文代写，英语论文代写，代写论文，代写英语论文，代写留学生论文，代写英文论文，留学生论文代写相关核心关键词搜索。