Tips for Success by Expert Accounting
Customer Deposits – How did this account get so big?
The pandemic has brought about a number of challenges and situations which has forced store owners to make changes and implement new strategies in order to survive and prosper in these ever-changing times.
In past “Tips for Success” articles, we have spoken of the importance of monitoring your Account Receivables on a regular monthly basis and the associated benefits of doing so.
Equally important to managing you’re A/R’s is the maintenance of your Customer Deposit accounts. These are the deposits received by customers for future orders. With the ongoing supply chain issues and the challenges associated with securing inventory in a timely fashion, many stores have experienced sizeable increases in their Customer Deposits accounts. Many of these deposit amounts have aged past the 90 and 120-day periods and require attention.
It is imperative that during this time there is regular contact being maintained with those customers to offer updates on their order arrival dates and current information on the supply chain situation. Doing so will ensure lower order cancellation rates and help to bolster customer satisfaction and store loyalty.
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