Which aspect of accounts receivable management helps reduce bad debts?

The aspect of accounts receivable management that effectively helps reduce bad debts is the implementation of effective dunning procedures. Dunning is the process of methodically communicating with customers to ensure the collection of accounts receivable. This involves sending reminders, follow-up letters, or making phone calls to customers who have overdue payments.

By actively managing collections through these procedures, organizations can maintain communication with customers and address any potential payment issues before they escalate into bad debts. Effective dunning procedures help reinforce expectations around payment timelines, enabling businesses to receive payments in a timely manner and minimize the risk of uncollectible accounts.

In contrast, while advanced sales techniques, frequent product promotions, and regular inventory checks are important for overall business operations, they do not directly impact the management of accounts receivable or the reduction of bad debts. Sales techniques and promotions may increase revenue or sales volume but do not necessarily improve the likelihood of collecting payment on those sales. Regular inventory checks ensure that products are available and in good condition, but they do not address the critical aspect of collecting payments from customers.