Uncollectible account

An uncollectible account is an account receivable that a customer is unwilling to pay. This situation can arise when a customer is disputing some issue regarding a billing, or has fallen into such difficult financial circumstances that it does not have the cash to make a payment. The seller typically writes off an uncollectible account after making a reasonable number of attempts to collect payment. At this point, the account may be shifted to an outside collection agency, which continues to make collection calls.