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.
I am guilty of taking to long on some accounts to pay .A key problem with paying accounts is reps , they will quite happily keep selling stock to you even if you are over your 30 day period I have one sales rep in particular that i tell i cannot order or do not want to order utill my previous account is settled in full before making another order but they just keep pushing and pushing to make the sale saying oh accounts won’t mind before they notice it your order would be pushed through . It takes some control not to listen to them but sometimes you do and thats when you get behind . At the end of the day i know it is my problem and not the sales rep but hey it dosn’t help .
Goal this year is less accounts and less suppliers , a lot of the times i like to pay up front and just get it out of the way .
On the other end of the spectrum bad debts from home delivery accounts have noticeably increased in the last 12 months. One things for certain – when peoples personal economic situation is tough, the newspaper account is at the very bottom of the pile.
Shayne your right there , whe rates are due just about all accounts go over due , have a flood no one pays , back to school , show weekend , any event really will stop paper accounts getting paid and from there it is a chain of events of accounts not getting paid
It’s your responsibility Shaun. Be tougher with your reps.
Jeff please read my post in full ,
At the end of the day i know it is my problem and not the sales rep but hey it dosn’t help .
Shayne charge a late fee on accounts that go into 30 days. No one likes paying a late fee, this helps them remember to pay on time.
My customers cannot handle the fact i put 30 day notices on there accounts let alone charge them for it . We often get abused for prining 30day or 60 day or 90 day on the statement
Mark, it surprises me to hear you say that it is the newsagents’ fault when he cannot pay his accounts.
The push model from the mag distributors is impossible to manage.
Stop 10 items and they add 10 more – they are the only people we cannot control and they in turn are controlling our cashflow to such an extent that we cannot pay other accounts (like stationery) on time.
Even using all the computer data in the world does not stop GG and Network from
clawing our money from us and no amount of “you can return it” plays into cash positive in our businesses because of the delays in getting the money back (while they continue with their push model)
It is the single most important factor in agents being cashstrapped and it needs to be recognized (and handled by the associations) and it NEVER HAS BEEN because they have relied on the distributors (and other suppliers) to foot
the bill for other events like conferences so they in fact, are serving two masters – the newsagents who pay membership and the suppliers from whom they accept sponsorships.
It’s just like the government who only sees big business because they contribute to the party coffers and small business is left out because we have nothing to offer.
It is an impossible situation and owning the problem does not make it go away.
I try not to be negative but this is a bitter pill coated with sugar to make it palatable and the truth gets lost!!
Shauns it’s your business not your customers. They do winge but you can’t give into them all the time. You obviously give great home delivery service – delivering papers at 6 pm when they arrive late – I think that’s fantastic service.
I stop my customers when they get to 60 days, I really should stop them earlier. Most pay immediately as they want their papers restarted. The bad payers aren’t always the battlers, many live in pretty big houses and drive nice cars. Don’t feel guilty you are not a charity.
Jenny , spot on it is normally the customer with the biggest dollar would be the slowest . When woollies and Coles were on direct supply with me they were the worse anything up to 90days . Stopped them several times . Then you have to back track invoices or they will not pay at all
if a supplier permits me to delay payment, why woulnd I ? gns are now bringing their account payment extension back from 15th of the month to 5th, no problem i will now pay it by the 5th instead of the 15th, dynamic still let it run to the 15th, so i pay it by the 15th.
check with big govt dept, big mining companies etc they often have a policy to not pay before 60days. i bet coles/woolies dont pay before 30days.
i appreciate the underlying message mark is trying to get accross about managing stock, but dont believe the 2 are tied together, you can still follow marks ideas above and free up cash, and still delay payment if it fits in with the supplier credit policy.,
June the model has not changed. yes the mag side is poor but it’s as it always has been. We order from suppliers and accept the obligation. Continued late payment only hurst us in the long run.
We have to be responsible to what we agree to.
Both my coles and woolies pay around 2 to 3 weeks. I have a relationship with the remote pay office for both because often the paperwork goes missing at source, and they skip weeks, when I notice this I always follow up and fax direct to Head office, then they put the payment into their pay stream. It is like clockwork most of the time, so it can be done.
Absolutely the biggest houses are the slowest payers and I DO add a late fees,
consistently. Electronic payments are a godsend, I have far fewer late payments these days. Email accounts sometimes are tricky, but i work with the customer one on one, I have a couple of customers who send my accounts into spam and they cannot work out why, i’ve gone back to paper account with them.
I am not good with late payers, so I let Baz ring them up, he’s got a wonderful way and they rush in in great bonhomie and pay up nicely!! I also have one staff member who is very good at keeping the putaway customers coming back, and also at handling reps, so I use her skills.
Shaun, use suppliers who will credit out slow-moving stock – If you ask you may be surprised, and it’s better to have new items than the old stuff on the shelf month after month. Re card companies,
Henderson are fantastic if they are in your area. I personally wouldn’t use Hallmark or John Sands because they don’t appreciate small businesses. Smaller companies do. However, where possible I also pay small companies on invoice rather than wait for a monthly statement, it creates good relations. I oay Gotch in increments, starting about the 15th of the month, accorsing to cash flow. they at least know I am trying to pay them bit by bit.
Hallmark cares appreciates small businesses as evidenced through their considerable support of newsagent awards, investment in TVCs, newsagent training, best-practice margin and investment in innovation driving double digit YOY growth.
rick,
I believe there have been policies put in place in both NSW and Federally to get government departments to pay small business within 30 days.
I charge a late fee on delivery accounts that are not paid on time. I do this manually each month ($2.50) taking into account each persons situation (husband might have gone to hospital, may be on holidays etc) when we first introduced the late fee, a number of customers asked about it, and I deleted the fee as a sign of good will.
we are a very small high street store, we have hallmark and they are very good to work with.
june’s point at #8 about the conflict that the associations have with relationships between their menbers and the sponsors/suppliers, is yet another reason I am not a member.
I did my big end of month returns yesterday (1 person@
4hrs), sending back titles that have never sold in this store and never will. sending back excessive quantities.
we need an association like the pharmcy guild, they are strong.