Cost of Bad Debt Calculator
See how much revenue you need to replace every dollar of bad debt
Key Concept
Revenue to Recover = Bad Debt ÷ Profit Margin. A $10,000 write-off at 5% margin means you need $200,000 in new revenue just to break even.
Your Numbers
$100,000
10%
Formula
Revenue Needed = Bad Debt x (1 / Profit Margin)
Revenue Needed to Recover
$1,000,000
10.0x multiplier on your bad debt
Reference Table
Revenue needed to recover a $10,000 write-off at various margins:
| Profit Margin | Multiplier | Revenue Needed |
|---|---|---|
| 2% | 50x | $500,000 |
| 5% | 20x | $200,000 |
| 10% | 10x | $100,000 |
| 15% | 6.67x | $66,700 |
Industry Benchmarks
Equipment Rental
| Top Performers | < 0.8% bad debt rate |
| Median | 2% |
| Poor Performers | > 3.5% |
Prevent bad debt before it happens
See how Able Collect helps teams identify at-risk accounts early and reduce write-offs.
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