How do I review a flooring store’s supplier rebate and return records?

Rebates can look like profit, so find out how they work. Ask which suppliers offer them, what the store must buy or display to qualify, and whether the terms change after an ownership change. A rebate tied to the current owner’s relationship may not follow the store.

Request the deposits that match each rebate. If claims were filed but payment never arrived, ask why. Then look at returns. Compare what customers sent back with what suppliers credited. A gap suggests the store absorbed the cost or has unresolved claims.

Ask how long returns take to be credited and whether any supplier disputes are open. Look at whether returns cluster around one product line or one installer, since that points to a quality problem you would inherit. Have your accountant check how these amounts appear in the financial statements, so you know how much of the reported result depends on them. Be careful with anything that arrives as a lump sum at the end of a season. Ask the owner to explain how it was calculated and whether it would repeat under your ownership. Sit down with the supplier representative if the owner allows it, and ask what the program requires and whether the store has ever missed a target. A rebate that depends on hitting a purchase level also affects what you stock, so factor that into your plans.

Key takeaways

• Match rebate agreements to claims filed and deposits received.
• Compare customer returns against supplier credits to find gaps.
• Ask whether rebate terms survive a change of owner.