Adocst 4, 1921 



The Florists^ Review 



21 



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TELL OWN CREDIT METHODS 



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ST. PAX7L FLORIST FBESCBIBES 

 EDXJOATINa THE CUSTOMERS. 



About eighty per cent of our sales 

 are charge sales. About sixty-five per 

 cent of our charge sales are paid 

 promptly by the fifteenth or twentieth 

 of the month. Nearly all of the balance 

 is paid within the next thirty days, but 

 there is always some carried over for 

 ninety days or longer. Our average 

 collections, however, throughout the 

 year are about sixty-five per cent of out- 

 standing charges the first of the month. 

 For instance, if we have outstanding 

 $50,000 on our books May 1 we are pret- 

 ty sure of collecting sixty-five per cent, 

 or $32,500, of this by June 1. The bal- 

 ance caryjed over to the following 

 month, together with May charges, con- 

 stitutes the total outstanding June 1. 

 Sixty-five per cent on retail business is 

 considered very good. 



We think our losses are less than one- 

 half of one per cent of the amount 

 charged during the year. 



Credit Superrision. 



We employ a credit man who looks 

 after and O.K. 's all charges before the 

 goods go out. We also belong to the 

 retail and wholesale credit association 

 of this city and are supplied with their 

 monthly "black lists," as well as their 

 yearly book put out by a collection 

 agency of this city. In addition to this, 

 of course, we have to rely on our per- 

 sonal estimate, on Bradstreet and Dun, 

 and on inquiries from other retail mer- 

 ••.hants in the city. 



If customers do not pay within sixty 

 days, our regular collector calls on 

 them. After he has called for two or 

 three months, if the account is of suffi- 

 cient size to warrant it and it is still 

 unpaid, we sometimes place the account 

 in the hands of the collection agency. 

 We have to be guided entirely by cir- 

 cumstances, our knowledge of the cus- 

 tomer, etc. 



We do not advertise to encourage ac- 

 '!Ounts and do not urge people unknown 

 to us to open accounts. At the same 

 time, if a person can furnish references 

 and his standing is all right in the com- 

 munity, we are plcnsod to open an ac- 

 '"ount. 



Instill Proper Methods. 



We think the wliolc trouble with the 

 florists as regards the credit situation 

 is that they are usually too busy to give 

 proper attention to credits and collec- 

 tions. There is no need of being "easy" 

 with customers simply because they are 

 buying regularly from you. One can 

 educate the buying jiulilic to his meth- 

 ods so that tlu'v will come to his terms 

 just as well as to let accounts slide 

 along for months and become almost 

 uncollectable. There is a certain do 

 grce of firmness that can be maintained 

 with tact and iiolitciu'ss, giving your 

 customers to understand their accounts 

 must be paid jiroinptly and at the same 

 time not offending theiu. Whenever 

 anyone gets m;id because you ask him 

 to pay his account which is past due, 

 vou can nine times out of ten count 



on that person's being a poor customer. 

 I think the whole credit question with 

 florists is a matter of educating their 

 customers. In fact, that same theory 

 •will apply to all lines of retail business. 

 If your customers are educated to pay 

 promptly and know that they have to, 

 there will not be much trouble. On the 

 other hand, if accounts are allowed to 

 run for several months and customers 

 get the idea that you are a little slack 

 in your collection methods, there is sure 

 to be trouble and the worst complaints 

 always come with accounts that are the 

 oldest. 



KANSAS CITY RETAILER SAYS 

 TRADE-CAUSES OWN TROUBLES. 



Fully sixty per cent of my business is 

 on credit. I can state that fully sev- 

 enty per cent of the accounts are paid 

 voluntarily by the fifteenth of each 

 month. 



The percentage of bad accounts that 

 are charged off at the end of the year 

 is at a minimum, equivalent to one per 

 cent; this is about three-fourths per 

 cent of the total sales. 



I allow persons to open an account 

 mostly from personal estimation and 

 using good judgment in reaching my 

 decision. In rare instances do I consult 

 a credit guide or ask for references. 



I collect some of the slow accounts by 

 getting in touch with my customers in 



HOW ABOUT YOU? 



In securing the facts regarding re- 

 tail florists' credit and collection 

 methods. The Review set a series of 

 questions before a number of them 

 as an outline to follow in presenting 

 the vital matters involved. Here 

 they are: 



(1) What percentage of total 

 sales is done on credit? 



(2) What proportion of monthly 

 accounts is paid promptly when due, 

 by 10th or 15th or whatever date 

 you set? 



(3) What percentage of credit 

 sales is charged oft as loss at end of 

 year? What percentage is it of total 

 sales? 



(4) On what basis do you permit 

 customers' orders to be "charged," 

 or accounts to be opened? Do you 

 ask references, consult a credit 

 guide, or -rely on your personal esti- 

 mate of the customer? 



(5) What collection effort do you 

 make? Have you a definite and es- 

 tablished procedure? 



(6) Do you discoiurage or encour- 

 age accounts? 



(7) Have you ideas or plans for 

 improving the retail credit situa- 

 tion? 



Kxainine your own case in the 

 liglit of these ((ueries. If you have 

 tigures or comment to sul)niit, to add 

 to this discussion, the Editor will he 

 iiljid to liear from vou. 



person and occasionally having my men 

 see them. I have no definite procedure 

 whereby I do my collecting. I prefer 

 cash to credit, but will extend ample 

 credit to good people. At the same 

 time, I watch all accounts and keep in 

 touch with all transactions. 



On Toes to Improve. 



I am constantly on my toes to improve 

 the retail credit business and advise my 

 customers that prompt payments insure 

 good service. Statements are rendered 

 the first and fifteenth of each month. 

 When an account becomes delinquent, 

 I do not allow it to become cold. My 

 delinquent list, which is made up on the 

 fifteenth of each month, helps me in 

 this respect. It is checked up with 

 each day's business. This list is type- 

 written and kept on my desk. It is 

 much easier to look over than the ac- 

 counts in the ledger. Experience has 

 taught me that an account is much 

 more easily collected when it is sixty 

 days old than when it is six months old. 



A large majority of florists' bad ac- 

 counts are caused through their own 

 negligence and lack of system, or by 

 their being afraid of losing a customer 

 if he is pushed too hard, if a customer 

 cannot pay within sixty days of pur 

 chase, I would just as soon lose him. 

 My system is to give good, honest 

 values and treatment, and I expect 

 the same in return. 



I make no apologies for going after 

 delinquent accounts. At times I use 

 the 'phone and call attention to the fact ^ 

 that the account is past due. In doing 

 so, I feel that the customer is obligated 

 to me and that I am justified in remind- 

 ing him of this fact. 



SUCCESSFUL SEATTLE FIRM 



USES PERSISTENT ACTIVITY. 



We find at this time of generally de- 

 jiressed business conditions a great de- 

 mand for credit. The florists of this 

 locality report favorably on total sales 

 as compared with last year and under 

 adverse conditions, l)ut business may 

 be termed sluggish on account of the 

 proportion of sixty per cent credit and 

 forty per cent cash in total sales, and 

 slow collections. We find that people 

 have money, but will loosen it only 

 when pressed by our bookkeeping de- 

 partment. Such being the case, we are 

 only able to collect on the average sev- 

 enty-two per cent of our monthly ac- 

 counts on or before the fifteenth or 

 twentieth of each month. These slow 

 collections have accumulated and in a 

 jieriod of one year we were forced to 

 charge off four-tenths of one per cent 

 of our sales. 



Credit Brings Business. 



During our experience we have never 

 been able to fornuilate a system where- 

 by we ciin give a customer the acid 

 test and we rely only on the personal 

 estimate we make of a customer and 

 take a gambling chanct;. Tli(> charged- 

 off Mccounts are posted in our tel(']ihone 



