Indicating more cautious approach to bad customer debt, Lucent nearly doubled funds it set aside for “doubtful” accounts in fiscal 2000, according to SEC filing. Lucent boosted reserve by 58% to $501 million in fiscal year that ended Sept. 30. Company, which had set aside $318 million in 1999, added $252 million to that this year. Despite extra cushion, Lucent wrote off only $69 million for bad debt, compared with $112 million in 1999. Heftier debt reserve is seen as way to make Lucent less vulnerable in future to uncollected bills and defaults by customers to which it has extended credit. Manufacturers such as Lucent extend fairly generous credit terms to new telecom companies such as CLECs to encourage them to buy equipment as they grow. However, in recent times CLECs have begun facing financial trouble, making manufacturers vulnerable to debt collection problems.
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