Bad debt is an unavoidable reality for many schools, especially in times of economic uncertainty. Budgeting for bad debt is essential for financial resilience and sustainability.

How to Budget for Bad Debt

• Analyse historical arrears data
• Estimate potential non-payment rates
• Allocate a percentage of fee income to bad debt
• Monitor arrears trends throughout the year
• Adjust budgets as needed based on recovery performance

Budgeting for bad debt does not replace effective recovery strategies—it complements them. Schools that proactively plan for bad debt are better equipped to maintain stability during difficult periods.

Prosperitas Debt Collectors supports schools by improving recovery outcomes and reducing the impact of bad debt on budgets.