Raising the allowance charges an expense today; releasing it adds to profit. Because the assumption is management's, a shrinking allowance while days-sales-outstanding rises is a combination worth investigating in the footnotes.
The allowance is genuinely necessary, and a company with none at all is either selling only for cash or being optimistic. The signal is in the direction of travel relative to the receivables book.
Example: Northwind Tools carries a $4.1M allowance against $95M of receivables, 4.3%. The prior year it was $5.2M against $72M, 7.2%. The release added roughly $1.1M to pre-tax profit.
Related: accounts-receivable, earnings-quality, footnotes, days-sales-outstanding, accruals