Even though I spent just over 10 years working for the largest public accounting firms in the country (not in accounting BTW), this is still an interesting question.
Here’s some questions to really think about with regard to customers…and there are many more.
How valuable are your customers to your business?
How much are they worth to you?
Can you put a number on their value to your business (outside of what they purchased)?
How easy are they to replace and upgrade like a piece of equipment?
Would it cost you more to lose a bunch of customers or a bunch of products?
I can virtually guarantee you don’t know the answer to most of these questions…why not?
Think about it in terms of assets and liabilities. How big of an asset is your customer to the survival of your business? How much would your business change if they were gone?
Do a comparison to your equipment and other assets. You can put a number on these and you know how much they would impact your business should they break or need replacing. Why not do this for your customers?
Treated right, your customers can be your biggest and most irreplaceable asset. Sure, you still need your equipment to build your products for them or have people to deliver the services, which you already have and understand. But regardless of whether you have a specific line item for them on your balance sheet, you should at least have them there mentally. Make up a separate “customer balance sheet” where they are included and see the differences. Because customers are worth the time to think about in the same way you would your other valuable assets.
Caution…this doesn’t mean you should treat them like a tangible asset…just value them like your most valuable assets. The risk to the business of losing them would probably have more impact on your business than your most valuable piece of equipment…which you can easily replace or contract.
It would be interesting if customers started asking you where they fit on your balance sheet.
