You can take from this information that it always pays to be prepared because late payments will undoubtedly cost you more than you know.
You may think that the total cost of a bad debt is the bad debt itself, but looking at the information above, this is just the tip of the iceberg. There is so much more to late payments that you may end up with double the original amount.
Doing due diligence before entering into a business transaction with another business is paramount to your success.
On the other hand, in business, you must always expect bad debts to occur. You should always have a bad debt account, where you can allocate a specific funds to be used to pay out the bad debts without crippling the company.
Paying out means removing money from your bad debt account and paying the overdue debt for the balance of accounts.