Which term refers to customers who have trouble meeting payment obligations?

The term "Bad Debtors" refers to customers who have difficulty fulfilling their payment obligations. These individuals or businesses may have a history of late payments or may be unable to pay their debts due to various financial difficulties. This classification is significant for businesses as it helps them identify potential risks associated with extending credit. By knowing who the bad debtors are, companies can take proactive measures, such as adjusting credit limits or seeking alternative payment arrangements, to safeguard their financial interests.

In contrast, "Slow Payers" typically refers to customers who pay their invoices late but may still have the ability to honor their debts. "Cautious Consumers" refers to those who are careful in their purchasing decisions, often avoiding risk in financial commitments, while "Creditworthy Clients" are those who have a reliable history of making payments on time and are considered low risk for lending or credit. Understanding these distinctions is crucial for effective financial management in business.