Tips & Tricks: September 2010 Archives

In this post we'll review how FloristWare can help with item #4 from the article on collecting receivables from the American Express OPEN Small Business forum:

4. Don't let the situation drag on

...Getting an account paid quickly is just as much a priority as getting it paid in full...

This is incredibly important. The longer you let an account go the less likely they are to pay. At best you are subtly teaching them that they can let things slide with you, that you are one of the vendors they can get away with paying last - an impression that means you will always get paid late. An even bigger concern is that they may go out of business or be totally broke before they get around to making payment. The actual outcome isn't as important as one simple truth - it's always better to get paid sooner rather than later.

How can FloristWare help? It starts with invoicing - take advantage of the feature in FloristWare that lets you send invoices automatically as soon as you complete the sale.

Next - stay on top of accounts with the receivables aging and Payment Chaser reports. These are designed to help you collect faster.

And don't be afraid to call. Florists generally don't want to make collections calls and often choose to just insert punitive terms on statements in the hope it will catch someone's attention. It probably won't - if someone is way behind it is likely they aren't even opening them. Use the payment chaser and give them a call. That is what it's for. Send duplicate invoices as needed - FloristWare makes it easy.

Also - change their account status. That way FloristWare will flag it if they try and make additional purchases so you can ask about their outstanding balance. And of course you should freeze their account as soon as you start to think you might not get paid.

There is a great article on collections On Bloomberg Businessweek that reinforces much of what we have been talking about here.

The biggest mistake small business owners make is waiting too long to follow-up. The probability of collecting on a delinquent account drops dramatically each month following the due date, from 81 percent after two months to 52 percent after six months, according to the Commercial Collection Agency Assn. If an invoice remains outstanding for 12 months, the chance of collection drops to less than 25 percent, the trade group says.

...and...

"Demand letters rarely make a difference. Instead, get on the phone. Find out why the customer is late and nail down a defined payment arrangement," Steven Harms, a Birmingham (Mich.)-based attorney and collections expert, advises. Inquire about the state of the customer's affairs: Is business slow? Why are payments late? Customers operating in good faith will use this conversation as an opportunity to discuss their inability to pay and try to negotiate a revised arrangement.

So - again - please use the features in FloristWare that let you stay on top of your receivables. Don't wait, don't just keep sending statements. Let FloristWare help you through the process. We want to see you get paid!

In this post we'll review the last - and most difficult - point from the article on collecting receivables from the American Express OPEN Small Business forum:

5. Know when to walk away

The hardest part of the collections process is recognizing when there simply isn't a way left to get a customer to pay an account in full. Whether you're dealing with a customer who has declared bankruptcy or simply disappeared, there is a point where it's simply a matter of giving up — rather than using your time to chase after an unpaid account, using that time to find new customers is just more practical.

You don't want to give up too easily, of course. But if you take a good, hard look at how likely your business is to receive payment and it seems to be close to impossible, it's time to consider settling for less or even walking away.

There may come a time you have to accept that payment may not be coming. At that point it is better to spend your time and energy collecting on the accounts that are more likely to pay or - even better - by concentrating on building new sales and getting new accounts.

Use the reports and notes in FloristWare to help you gauge when an account is a lost cause and then use the "write off" tools to clear it out so you aren't constantly being reminded about it. You also want to be sure to close the account so that no further charges can be made.

Earlier in the week I was speaking with a user who shared a great way to end phone each phone order. She encouraged me to pass it along to the other users - I hope you find it useful.

At the end of each order she explains to the customer that they will receive three e-mails. The first will be their receipt, and she encourages them to review it carefully and call back if there are any questions or concerns.

The next e-mail will be a delivery confirmation. Here you want to stress that you are adding this valuable service free of charge.

Finally she explains that in a few days she will send a follow-up email - just to make sure that everything went well and that everyone was happy with the flowers.

Here is the best part - she will also ask for an online review/recommendation! She is putting all this great customer service forward (putting the customer in her debt) and then politely asking for a small favor in return. It is a great idea and a very persuasive technique.

Please give it a try!

We have a lot of new users over the past few months and - as they become more familiar with FloristWare - they are starting to ask more advanced questions. With that in mind we're going to review some of the most important topics.

First we're going to look at charge accounts. A charge account lets your customers charge their purchases to an account and be billed later. Related articles appear below:

Accounts Receivable: Adding New Accounts
This article will show you how to add new charge accounts.

Accounts Receivable: Clearing Credit Balances
This article will teach you how to "Tidy-Up" your Accounts Receivable by clearing any accidental overpayments.

Accounts Receivable: Default Accounts
This article explains how default accounts are selected and "attached" to your customers.

Accounts Receivable: Editing An Account
This article will show you how to edit the information that you have on file for an account.

Accounts Receivable: Opening Balances
This article will show you how to record an opening balance when opening a new account.

Accounts Receivable: Recording Payments
This article will teach you how to accept a payment on account.

Accounts Receivable: Writing Off Unpaid Invoices and Balances
This article will show you how you can write off unpaid invoices and balances in your Accounts Receivable.

It is also a good idea to read up on Deferred Payments - starting with an explanation of how they differ from charges to accounts:

Payment Methods - Deferred vs Account
What is the difference between 'Deferred' and 'Account' Payment Methods?

Defer Payment: What It Means and When To Use It
This article explains what the "Defer Payment" option does and how it is meant to be used.

Defer Payment: Collecting Deferred Payments
This article explains how FloristWare can help you collect deferred payments.

Defer Payment: Taking Deferred Payments
This article explains how to enter a payment for a sale on which payment was initially deferred.

Some of our newer users have been showing a lot of interest in some of these powerful features. We haven't covered them in a while so we've assembled some material below.

Reminder Calls

Reminder Calls: Set-Up
This article will show you how to activate the Reminder Call feature.

Reminder Calls: Making Effective Reminder Calls
This article will show you to make effective reminder calls that turn into orders.

Sales Calls

Sales Call: Set-Up
This article will show you how to activate the Sales Call feature.

Sales Calls: Making Effective Sales Calls
This article will show you how to make effective sales calls.

Listen in iTunes
If you spend any time stuck in traffic you might consider listening to this series of seven podcasts covering these and other FloristWare marketing strategies.

Some of our newer users have been showing a lot of interest in some of these powerful features. We haven't covered them in a while so we've assembled some material below.

Reminder Calls

Reminder Calls: Set-Up
This article will show you how to activate the Reminder Call feature.

Reminder Calls: Making Effective Reminder Calls
This article will show you to make effective reminder calls that turn into orders.

Sales Calls

Sales Call: Set-Up
This article will show you how to activate the Sales Call feature.

Sales Calls: Making Effective Sales Calls
This article will show you how to make effective sales calls.

Listen in iTunes
If you spend any time stuck in traffic you might consider listening to this series of seven podcasts covering these and other FloristWare marketing strategies.

Many newer users have mentioned that they get a lot of "do you know if my order has been delivered yet?" calls.

FloristWare can help. The ProgressTracker feature will give you instant access to the status of any order and can also be used to send delivery confirmations.

For detailed instruction please see this instructional video.

FloristWare allows you to discount by either percentage or fixed amount at the sale, order or item level. For more information please see this support article.

Some users have asked about the process of selecting Product Categories and Products - specifically the default sort order of the lists. Even more specifically they have asked why it is that newer products/categories go to the bottom of the list.

The answer is that - by default - FloristWare sorts these lists by popularity. Every time a product/category is selected it's popularity increases. Each time you come to the list FloristWare puts the most popular items at the top.

This is a problem when you introduce new products/categories because they will go to the bottom of the list and stay there until they "catch up" to the other older products. Fortunately there are several solutions.

The first is changing the sort order of the list - just click on one of the blue column headers to sort the list by that criteria, click again to reverse the sort.

You can also reset the popularity:

Settings > Lists > Product Categories > Erase Popularity
Settings > Lists > Products > Clear Popularity

These buttons will clear the popularity so that all products/categories start over and the most currently popular will quickly rise to the top. This is very handy if you introduce seasonal products and want them to appear first.

There is a third solution if you don't like the popularity sort and would prefer to go use an alphabetical sort by product name. The advantage here is that the list never really changes - some people find that kind of consistency easier to work with.

Settings > Policies > Policy - Default Sort Order

This will allow you to choose the default sort order you feel will work best for your store.

Every day you run a daily sales report. Do you also take the time to fill out the information in the "Notes" tab?

You should. You don't have to get into a lot of detail but enter information about the weather at the very least and some staffing comments if at all possible.

Why? Because you can then use the "Daily Notes" report to make some really interesting predictions. For example: It is Wednesday afternoon and the forecast says Friday will be very cold and snowy. You can search for all cold, snowy Fridays and FloristWare will show you the trends for those days. This lets you plan efficiently.

You'll need to stay it for a while - the feature is useless until you have some history in the system. Once it's there you will be glad you did it.