Ship-and-debit

Definition

The claim a distributor bills back to a manufacturer for the spread on a discounted shipment.

Why It Matters

This is the receivable nobody counts. It is owed by a manufacturer and not a contractor, it is created by paperwork and not by a delivery, and it is denied more often than a trade receivable is. A house carrying a large ship-and-debit balance is carrying a collection risk that does not appear in a customer aging report at all. Ask for the balance by manufacturer, the average age, and the share of claims rejected in the last two years, and treat anything old as a valuation question and not a timing one.