Factors that might cause a company to adjust the percentage(s)used to estimate bad debts might include:

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All of the factors listed can impact a company's ability to collect on its accounts receivable and therefore may require adjustments to the percentage(s) used to estimate bad debts. For example, a downturn in the local economy might cause more of a company's customers to default on their payments. Similarly, changes in a customer's credit rating or industry conditions could impact their ability to pay their bills on time.

Factors That Might Cause a Company to Adjust the Percentage(s)used