Australian businesses are being warned they need to make an early assessment of their bad debts this financial year, as to whether or not they are recoverable or written off.
Privately-owned debt collection firm Prushka Fast Debt Recovery says businesses should think ahead when writing off debts that are not likely to be recovered.
“If you are hoping to get a tax deduction for the write-off of a bad debt, you have to take active steps prior to June 30,” said Prushka chief executive Roger Mendelson.
“There must be a physical act of treating it as a bad debt prior to June 30 – it is insufficient to wait until preparation of accounts after the end of the financial year.”
Mr Mendelson said one of the important steps businesses must take is actually resolving the fact that the debt is unrecoverable.
He said if the person or company owing the money is bankrupt or has gone into liquidation or receivership there would be a reasonable basis to conclude the debt could be written off.
For this complete story, please visit Australian Businesses Urged to Act on Bad Debt.
