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
White Papers
Provided by Personify Health
Further Reading
Seven months after its release, ChatGPT is being touted as a replacement for a range of occupations. Artificial Intelligence (AI) tools lik...
If yours is like most companies, you’ve got at least one staffer managing cash application of payments. And if your cash application ...
Wealthy investors are about to lose a tax loophole that IRS allowed for years. The tax cops say its new policy and enforcement will net bil...
Mastering the basics of Excel is the gateway to understanding more advanced features. Starting with basic cells and progressing to Pivot Ta...
Plenty of financial gurus lauded the Federal Reserve for hiking interest rates and its stated goal of ratcheting down inflation. After mult...
Let’s be real: The enthusiasm behind real-time (or instant) payments stems almost entirely from the seller’s side of B2B. After...
