Turn a Profit on Bad Debt
The Impact of Metro Group as Your Trusted Partner
When companies hire Metro Group to collect bad debt and receivables that otherwise would be washed from the books, they effectively create a new profit center. As receivables age, a corresponding allocation for the debt is captured on the balance sheet as a liability, reducing the accounts receivable on the asset side. This debt provision is funded from the income statement by reducing EBIT. As Metro Group recovers the receivables in question, the opposite accounting mechanics go into effect which means net income is increased by the recovered assets.
For example, imagine that CarrierCo places a portfolio of $1 million with Metro Group, which has an average aging of over 180 days at time of placement. This portfolio has a bad debt allocation of 50% or $500,000, and as Metro Group recovers the full balance, the $500,000 allocation is captured as an increase in earnings on CarrierCo’s income statement. In this regard, Metro Group effectively operates as a profit center for your organization, and importantly, our clients benefit from higher cash flow resulting from the collections, which improve their balance sheets and reduces debt to fund new investments or cover operating expenses.
Few services have such resounding value, and Metro Group’s team of industry experts and in-house attorneys are ready to build a new profit center for your company.
Shipping, logistics, and transportation companies have come to rely on Metro Group for the past 25 years because of its positive bottom-line impact. With each successful collection of unpaid receivables, Metro Group adds to the profitability of its clients. To learn more about Metro Group’s services, please contact us at email@example.com or visit our website, www.mgmus.com.