What is ‘Back Charge’
A billing made to collect an expense incurred in a previous billing period. A back charge may be an adjustment due to an error, or it may be to collect an expense that was not billable until a later period due to timing issues.
Explaining ‘Back Charge’
When possible it is best to avoid having to back charge for products or services. Because back charges may be unexpected by customers and can be confused with billing errors, they often take longer to collect. In general, the more promptly a company can bill a customer, the higher the probability of collecting the amount billed in a timely manner.
Further Reading
- Trends in park tourism: Economics, finance and management – www.tandfonline.com [PDF]
- The economics of the private placement market – heinonline.org [PDF]
- A critical financial analysis of the Private Finance Initiative: selecting a financing method or allocating economic wealth? – www.sciencedirect.com [PDF]
- Conceptual issues and the Australian experience with income contingent charges for higher education – academic.oup.com [PDF]
- Off the cliff and back? Credit conditions and international trade during the global financial crisis – www.sciencedirect.com [PDF]
- reverse charge procedure – www.elgaronline.com [PDF]
