What % of bad debts to you allow for in your business

Me 0%

Total in 5 years £384 on about £7m of turnover.

Caught when HMRC closed a guy down for failing to keep to a deferral arrangement.

Luck - or good credit control?

You can judge by my posts elsewhere.

In my career to date (as a Credit Manager and in my own business dealings):

Written off £250K on business of £750M - mostly based on a high risk appetite. 

There is a school of thought that says there is no such thing as a bad debt.  and that actually some bad debts are good debts :-)  of course it depends on the credit policy you run.

If you run a tight credit policy and will only do business with top notch ppl/companies then you need to collect hard and any bad debt is a big mistake.

If you have a high risk appetite (pay day lending companies for instance) then you expect a % of bad debts and that is perfectly acceptable if you build it into your plans for market penetration and your profit margins.

Personally I allow for a 5% BD figure on my offline businesses (not the credit related stuff) and I go in hard for my cash every time 

Chris, I'm going to say that you run a tight ship and that you know your stuff (that is from your posts here and what others tell me), so it comes as no surprise to me your figures are good.

That said I have lost about £300 from 2 suppliers going under with services still owing to me.

In the 3 cases above contact was made through 4N which goes to show due diligence is required even when dealing win businesses here.

Like Bruce, most work is paid for up front, and if I do allow credit to a client i make it very clear what the payment stages are and when it is due. In my first six months of business, all has been ok, although there was one point where I did get a little worried about a client who'd gone very very quiet!

An interesting subject- especially given the current climate!

Although not appropriate for many businesses, if you've a high value invoice or customer that could seriously effect your business if they fell over, why not consider debtor protection/credit insurance?