As you are aware, we currently expect to collect 80% of our wholesale debtors in the same quarter, 18% in the following quarter and we write off 2%…

As you are aware, we currently expect to collect 80% of our wholesale debtors in the same quarter, 18% in the following quarter and we write off 2% as a bad debt.

We want to improve this and expect that if we allow a 3% discount for payment in advance, our collections will improve to 90% received in the same quarter and, 9% in the following quarter with only 1% becoming a bad debt.

Note that the discount allowed of 3% will apply to 40% of our wholesale clients.

Please provide another version of your budget reflecting this change in collection pattern.

How would the discount allowed and bad debts will be treated in the financial budgets according to information above.