Council writes off bad debt

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Lloydminster council has approved an adjustment to their bad debt from accounts deemed uncollectible.

Read more: City continues success in collecting fees 

Select accounts-receivable customer arrears have been deemed uncollectible after internal and external collection attempts. Due to these accounts, an adjustment to bad debt expense is recommended to ensure the City’s accounts receivable balance is not overstated.

The city outlined their process in attempting to collect these outstanding debts. In the first 30 days, the customer is issued an invoice and receives a 30-day grace period to pay. The following 30 days, the customer is contacted informally by phone and email regarding the payment.

The customer then receives a collection letter from accounts receivable followed by a second letter before it is sent to external collections. The entire process is roughly 120 days in total. 

Council must approve the uncollectible accounts before they can be written off.

“It would come off as it’s an expense, it ends up being an expense the city has to incur and it goes against the books,” said Mayor Gerald Aalbers. 

The balance written off from customer accounts are monitored for a period of 10 years.

Council passed the motion to approve an adjustment to bad debt totalling $38,593.22 for 13 customer accounts.

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Christian Apostolovski
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