How can I verify a linen service’s loss and replacement rates?

Begin with inventory. A linen service owns thousands of pieces that move between plant, truck and customer, so ask how items are counted in and out, and how often the counts are reconciled. A business that tracks pieces by customer will show losses clearly. One that tracks only by weight may hide them.

Then follow the money. Replacement purchases should line up with write-offs in the financial statements. If the seller claims few losses but buys stock steadily, find out why. Look at credits and charge-backs to customers too, because a service that absorbs most losses quietly will carry that cost into your first year.

Talk to the plant staff about wear. Items fade, tear and stiffen at different speeds depending on the wash process, and the people on the floor know which customers return stock in poor shape. Ask which accounts cause the most trouble and whether contracts let the service bill for lost items. Last, compare several customers rather than the average. A single large account with high losses can distort the whole picture. If you can, ask for a physical count of one customer’s stock at the plant and on site, then compare it with the books.

Key takeaways

• Match purchase invoices for new linen against write-offs and customer credits.
• Ask how pieces are counted, and how often counts are reconciled.
• Check losses account by account, not only in the overall average.