Is it worth chasing down that deduction?
Naturally you hate the thought of leaving any money on the table. But at times it’s smarter to write off a customer deduction.
It’s a standard cost/benefit analysis: Devoting staff time and effort to reclaim a nominal deduction just doesn’t make sense. Major efficiency drain.
But how do you know where to draw the line?
There’s no magic number, but the average “nuisance” deduction companies write off is between $30 and $40.
Finding your threshold
To determine whether that’s a good threshold for your business, consider these factors (besides the time and money it takes to fight the deduction and adjust your bookkeeping) according to credit expert Michael Dennis:
- how long your current backlog of outstanding deductions is
- how long it’ll take before staffers can get to the deductions
- your current staffing levels in Credit and Collections, and
- how helpful other internal departments are in researching deductions.
And remember this reality check: The odds aren’t in your favor. More than half the time deductions are taken, the customer is at least partially correct.
- Share on
Free Training & Resources
White Papers
Provided by Anaplan
Webinars
Provided by SkyStem
Further Reading
Believe it or not, there’s still money left on the table for companies that kept workers on their payrolls while struggling to stay a...
Auditors sought a single principle for accounting of software costs. But after months of consideration, the Financial Accounting Standards ...
Your finance staffers watch for duplicates and other payment slip-ups all year long. But why should they be especially cautious this&n...
How did a diversity, equity and inclusion (DEI) program manager defraud Facebook and Nike of more than $5 million? With the help of crooked...
The Internal Revenue Service (IRS) has released the Affordable Care Act (ACA) affordability update for 2027, giving employers a new figure ...
A lot more contractors and businesses like yours that receive payments via CashApp, PayPal or Venmo have been bracing for getting a 2022 Fo...
