Discussion at the newsagents yahoo email group last week indicate the extent to which newsagents delay payment for stock. I know of newsagency suppliers with average collection days for 30 day accounts of 55 days and more. This is a problem for the chanel as it pushes up prices for all of us.
Newsagents can better manage their trade debtors by following some simple steps:
- Order stock based on what is selling. This stops you swelling your shop with too much speculative product. If you want to bring in something new, convert some existing stock and space to cash first. Use your computer system.
- Track how quickly you turn your stock by department and supplier. Use your computer system. You will probably change your current buying decisions. You can access the data easily.
- Look at two or three key management reports weekly. Stop waiting for your accountant. Stop relying on someone externally. Use your computer system. It knows more about your business performance than anyone.
- Be accountable. If you can’t pay an account on time it is your fault and you have to fix it.
I’ll gladly help any newsagent wanting advice on which reports to produce and how to read them for genuine business value.