How does Cr3 American Exteriors record accounts receivable?
Cr3_American_Exteriors Franchise · 2025 FDDAnswer from 2025 FDD Document
s are deposits in-transit from banks for payments related to third-party credit card and debit card transactions.
Financial Instruments
For certain of the Company's financial instruments, including cash and cash equivalents, accounts receivable, long term notes receivable, accounts payable and accrued expenses, the carrying amounts approximate fair value due to their short maturities.
Accounts Receivab
Source: Item 23 — RECEIPTS (FDD pages 53–150)
What This Means (2025 FDD)
According to Cr3 American Exteriors's 2025 Franchise Disclosure Document, the company records accounts receivable for amounts due based on the terms of executed franchise agreements for franchise sales, royalty fees, and other revenues. These receivables are carried at the original invoice amount, with a reduction for an estimated amount of doubtful receivables. This estimate is based on a review of outstanding amounts.
As of December 31, 2024, Cr3 American Exteriors had accounts receivables totaling $312,709. The company deemed all of these accounts collectible at that time. This indicates that Cr3 American Exteriors management believes they will receive the full value of these outstanding invoices.
For a prospective franchisee, this accounting practice means that Cr3 American Exteriors is conservative in its revenue recognition, only recognizing revenue when it is reasonably assured of collection. This can provide a more accurate picture of the company's financial health. Franchisees may want to inquire about the specific criteria and processes Cr3 American Exteriors uses to determine the allowance for doubtful accounts to better understand the risk associated with outstanding receivables.