476A – Charge Backs & Repo Losses

New Subaru Department

Sales Synopsis

Account 476A

Debits

Credits

 

 

  1. The only credit entries to this account should be to adjust or correct a previous debit entry, or reduce an accrual at year end if actual losses did not occur but were accrued for.

676A – Charge Backs & Repo Losses

New Subaru Department

Cost of Sales Synopsis

Account 676A

Debits

Credits

  1. Amount charged back for early payoff of finance contracts, insurance contracts or extended service contracts.

  2. Actual losses incurred due to repossession of a customer vehicle.

  3. Provisions for anticipated losses in the event the retailer participates in recourse contracts, or offers in-house finance arrangements.

 

 

 

Remarks:

 

Charge backs should be reviewed by management to assure they are valid and not excessive as compared to other retailers.  Excessive charge backs may be a result of a lack of controls in the F& I department.

Every effort should be made to keep costs down when repossessing a vehicle and the customer should be billed for all allowable charges, they are responsible for.  Be sure to consider charge backs as part of compensation plans for those paid commissions on F&I Income.

Note: