Company: PAYX
Filing Date: 2025-09-30
Form Type: 10-Q
Source: 0001193125-25-224997
Chunk: 8

Company: PAYCHEX INC
Filing Date: 2025-09-30
Form: 10-Q
Item: Part I, Item 8
Chunk 8
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 compensation insurance policies.  Accounts receivable, net of allowance for credit losses: Accounts receivable balances are shown on the Consolidated Balance Sheets net of the allowance for credit losses as follows:  

           August 31,

           May 31,

           In millions
            
           2025

           2025

           Trade receivables
            
           $
            
           222.1

           $
            
           205.4

           Purchased receivables

           1,161.6

           1,151.1

           Total accounts receivable, gross

           1,383.7

           1,356.5

           Less: Allowance for credit losses

           24.4

           26.0

           Accounts receivable, net of allowance for credit losses
            
           $
            
           1,359.3

           $
            
           1,330.5

          Trade receivables are for services provided to clients in the normal course of business and purchased receivables are acquired from the Company's clients under non-recourse arrangements.  The Company is exposed to credit losses through the sale of its solutions and support services, payment of client obligations, and collection of purchased receivables. To mitigate this credit risk, the Company has multiple programs in place to assess and continuously monitor each client’s ability to pay for these solutions and support services. Credit monitoring programs include, but are not limited to, new client credit reviews, establishing appropriate credit limits, monitoring of credit distressed clients, and early electronic wire and collection procedures. The Company also considers contract terms and conditions, client business type or strategy and may require collateralized asset support or prepayment to mitigate credit risk. Accounts receivable are written off and charged against the allowance for credit losses when the Company has exhausted all collection efforts without success. The Company estimates its allowance for credit losses based on historical loss activity adjusted for current economic conditions and reasonable and supportable forecast factors, when applicable.