ACCOUNTS RECEIVABLE

3 Months Ended

Sep. 30, 2022

Accounts receivable include amounts due to the Company for sales of equipment, other amounts due from customers, merchant service receivables, contract manufacturers, and unbilled amounts due from customers, net of the allowance for uncollectible accounts. Accounts receivable, net of the allowance for uncollectible accounts were $41.4 million as of September 30, 2022 and $37.7 million as of June 30, 2022. Accounts receivable from one contract manufacturer represented 17% and 16% of accounts receivable, as of September 30, 2022 and June 30, 2022, respectively.

The Company maintains an allowance for doubtful accounts for losses resulting from the inability of its customers to make required payments, including from a shortfall in the customer transaction fund flow from which the Company would normally collect amounts due. The allowance is calculated under an expected loss model. We estimate our allowance using an aging analysis of the receivables balances, primarily based on historical loss experience. Furthermore, current conditions are analyzed on a quarterly basis as we reassess whether our receivables continue to exhibit similar risk characteristics as the prior measurement date, and determine if the reserve calculation needs to be adjusted for new developments, such as a customer’s inability to meet its financial obligations. The Company writes off receivable balances against the allowance for doubtful accounts when management determines the balance is uncollectible and the Company ceases collection efforts.

The following table represents a rollforward of the allowance for doubtful accounts for the three months ending September 30, 2022 and 2021:


	Three months ended September 30,
($ in thousands)	2022		2021
Beginning balance of allowance as of June 30	$	9,328	$	7,715
Write-offs	(127)		—
Provision for expected losses	1,044		312
Balance at September 30	$	10,245	$	8,027

The increase in the provision for expected losses for the three months ended September 30, 2022 was driven by an increase in the accounts receivable balances from additional equipment sales during the quarter and an increase in the aging profile of our outstanding accounts receivable balances. We have taken various steps with a focus on increasing collection effort to reduce outstanding accounts receivables such as hiring of additional accounts receivable personnel, reducing operational inefficiencies within our processes and moving customers to a transaction fund flow model for equipment sales.