Wholesale parts charges accts.

[kcjones]

This should be a interesting question for this group.

Although I personally dont like charge accounts its part of the wholesale business.

Anyone in this group doing anything as far as offering rebates or a larger discount if charge accounts paid within 15 or 20 days. Its standard practice in a lot of other businesses to offer a 1 or 2% discount if paid net 10.

I know this is the group that controls the money!!! Any ideas?

[texaslp]

I suspect you may find that your good paying customer's will be reaping the benefit of the discount, and your slow pays will still be slow pays. Just my opinion though, haven't tried it.

[pjdevereaux2003]

How about you can't charge anything this month unless last month's bill is paid.

[Old Irish]

Wholesale accounts often have cash flow problems...especially body shops ...so caution is required.

On the other hand, there's a big difference between a "no pay" and a "slow pay".

We'll usually "work" with wholesale accounts so long as they pay something *on a regular basis* and keep the communications open.

All I'm saying is don't cut your nose off to spite your face

Cheers
DD

[fburrows]

I dont think discounts are the answer. As someone pointed out your good customers will take the discount and the poor payers will still pay late and probably take the discount anyway.

I think the only effective way to manage these customers is a polite phone call when they are a few days late. Then another one every week until it is paid. I am sure they are paying everyone late but if they know that they are going to get a call every week from your dealership then you will get paid ahead of the others that just wait.



------------------
Frank Burrows
fburrows@absdata.com

[scotstrong]

The biggest problem we find in dealing with bodyshops is how many of them want to work off of your money until they get paid by insurance for the job. We do occasionally have to remind accounts that we have no such agreement with them and that our open account terms are net 30. One of their more common "stall" tactics is to request copies of invoices they are supposedly missing. We have gotten in the habit of just automatically reprinting copies of past due invoices and attaching them with the statement when we mail it out. This pretty much eliminates that "stall" method.

Then you have the shops who want to try and pay a past due balance with returns; but that is another entire issue probably worthy of its own discussion thread.

Scot Strong

[mc6792]

The timing of this issue was perfect because my office is wondering why we have to overide so many accounts. Our average credit limit is $1000.00. For many high line repairs, this limit gets eaten up very fast. What is the average credit line for someone with good credit and pays their balance on time? In our industry, does house credit seem the norm?

[jazdale]

mc
Though a grand may be a good average, you'll find its too much credit for some and not enough for others.
I would place more empasis on past due then I would on credit limits.

A typical dealer only has about 100-200 a/r customers. Each one should be evaluated so the over-credit message is helpful, and not a nuisance.

Look at your over-credit limit reports or a 12 month a/r history report. If a customer is continually spending 3k a month and paying it off, ...well, you know what to do.

[texaslp]

We start new businesses at 500 or 1000, monitor them for awhile, then raise as needed if no problems.

[kcjones]

This is always a interesting subject. My large charge accounts have limits from 20,000 up to 50,000. Only a few very large chains bodyshops have this type of limit. But I have body orders getting larger and larger. This year I have one order for 20k in parts alone. They didn't total the vehicle.

When I talk about offering discounts for early payment I dont say it lightly as I dont want anymore money out of my pocket.

I do a large wholesale parts business and for the most part my customers pay their bills. But always looking for new ideas as I dont want to lend anyone money for free and let them work off of my money.

thanks for the replys