A standard business practice offsets future costs by funding a reserve for returns – but many small businesses don’t do it
In my 30-plus years of being an accountant I have learned many business lessons from people who were much smarter than me. Jerry Crawford was one of those people. Jerry taught me about product returns.
Jerry – who sadly passed away a decade ago – sold carpets wholesale from a nondescript little building in south Jersey. He employed about 50 people and counted many local and national carpet retailers as his customers. When I reviewed Jerry’s books, I noticed a large reserve for “returns”.