Quarterly report pursuant to Section 13 or 15(d)

Allowance for Doubtful Accounts and Falloffs

v3.23.1
Allowance for Doubtful Accounts and Falloffs
6 Months Ended
Mar. 31, 2023
Allowance for Doubtful Accounts and Falloffs  
Allowance for Doubtful Accounts and Falloffs

2. Allowance for Doubtful Accounts and Falloffs

 

Direct hire placement service revenues from contracts with customers are recognized when employment candidates accept offers of employment, less a provision for estimated credits or refunds to customers as the result of applicants not remaining employed for the entirety of the Company’s guarantee period (referred to as “falloffs”). The Company’s guarantee periods for permanently placed employees generally range from 60 to 90 days from the date of hire.

 

Falloffs and refunds during the period are reflected in the unaudited condensed consolidated statements of operations as a reduction of placement service revenues and were approximately $269 and $803 for the three-month periods and $433 and $1,497 for the six-month periods ended March 31, 2023 and 2022, respectively. Expected future falloffs and refunds are estimated and reflected in the consolidated balance sheet as a reduction of accounts receivable as described below.

 

An allowance for doubtful accounts is recorded as a charge to bad debt expense when collection is considered to be doubtful due to credit issues. The Company charges off uncollectible accounts against the allowance once the invoices are deemed unlikely to be collectible. An allowance for placement falloffs also is recorded as a reduction of revenues for estimated losses due to applicants not remaining employed for the Company’s guarantee period. The combined allowance for doubtful accounts and falloffs were $702 and $738 as of March 31, 2023 and September 30, 2022, respectively. The allowance consists of $581 and $548 for doubtful accounts and $121 and $190 for falloffs as of March 31, 2023 and September 30, 2022, respectively.