Cash Management Tips for Tire Dealers - Tire Review Magazine

Cash Management Tips for Tire Dealers

Cash is the lifeblood of tire dealerships and any other small business. Below are some tips to help your shop maintain a sufficient cash flow to meet its financial goals and run efficiently.

Toughen up your credit policies. Review the payment terms you offer to customers and tighten them up if slow payment is a problem area for your business. For instance, how long are customers given to pay? What action will be taken if a payment is missed? Be sure your credit terms are communicated effectively to customers before transactions are entered into.

Tip: Consider requiring advance payments – at least in part – for new customers.

Tip: For many businesses, a routine credit check should be performed before a sales or service transaction is entered into with a new customer.

Come up with a budget – and stick to it. Surprisingly, many small businesses do not engage in the budgeting process. A budget can be extremely effective in helping you keep track of whether cost- and revenue-related goals are being met. Depending on the size and complexity of the business, the budget process might be informal or formal, lengthy or simple. Projected revenues and expenses should be broken down by months.

Tip:
If you don’t already do so, budget for next year’s revenues and expenses near the end of each year. Review budgeted to actual results monthly.

Tighten up billing. If collecting bills has become a problem for your business, you might want to consider increasing the intervals at which customers are billed – e.g., from three months to one month, or from one month to two weeks.

Tip: Review your accounts receivable weekly or even daily to make sure slow payers are not allowed to slide.

 


RichardL. Lipton CPA & Associates LLC, located in Florham Park, N.J.,draws on its founder’s 10 years as a stockholder and manager offamily-owned Sam’s Tire Co. in Paterson, N.J.

RichardL. Lipton CPA & Associates LLC “is structured to personally servelarge and small clients who have a need for business consultingservices as well as accounting and tax services. We have even developeda niche in the area of forensic accounting. Our clients have realizedthat this combination of skills is extremely valuable in providing thehighest quality professional services in today’s and the future’seconomy.” – Richard L. Lipton CPA
 
Contact Richard L. Lipton CPA & Associates LLC:

Call: 973-520-8123
E-mail: [email protected]
Web: www.liptoncpa.com

 

You May Also Like

Tire Industry Labor Shortage: Improve This to Keep Employees

I’ve spoken to many representatives from manufacturers, wholesalers and retailers who report that techs, counter people, drivers and even white-collar team members have walked off the job, failed to report, or given notice, and their businesses have been impacted by these departures. This isn’t just a tire industry issue—and goes beyond the tech shortage that

Tire Industry-Labor Shortage-Great-Resignation

I’ve spoken to many representatives from manufacturers, wholesalers and retailers who report that techs, counter people, drivers and even white-collar team members have walked off the job, failed to report, or given notice, and their businesses have been impacted by these departures. This isn’t just a tire industry issue—and goes beyond the tech shortage that has plagued the industry for decades.

Consider Software Solutions to Streamline Operations

Representatives from several software providers share how solutions drive efficiency and profitability, as well as what to look for when considering a system in your shop.

software-solutions-stock
How Data, Analytics Can Boost Profitability for Tire Retailers

By collecting and analyzing data about a dealer’s sales history, inventory levels and market demand, data and analytics platforms can analyze the performance of each dealer’s store and recommend actionable improvement opportunities.

How to Start the PPP Loan Payback Process

For many PPP loan recipients, it is time to start the repayment process—or file for PPP loan forgiveness. Read on to find out which portion of your loan may be forgivable and how to apply for forgiveness, as well as how to start the repayment process.

Creating a Positive Work Environment

Larry Sutton of RNR Tire Express shares seven different practices that have helped him create a positive work environment.

Other Posts

K&M Tire Dealers Go ‘All In’ at 2023 Conference & Trade Show

K&M Tire provided the fun, prizes and resources to dealers during its annual conference and trade show.

Synchrony Offers Four-Installment Payment Plans Through Clover App

Synchrony announced that merchants will now be able to offer a short-term, no-interest installment option, Synchrony “SetPay in 4,” via the Clover point-of-sale and business management system from Fiserv, Inc. This buy now, pay later (BNPL) offering will further expand the reach of Synchrony’s payments and financing options and enable select merchants that use Clover to accelerate

consumer financing auto shop
Using Data to Enrich the Customer Experience

Attaching data or a number to a vehicle’s service record adds a level of transparency to the discussion, and moves it from an “opinionated upsell” to a true, fact-based service need.

Coats Tread Depth Data
Microlearning Makes the Tire Industry Smarter, More Profitable

Microlearning modules can be customized to company and team member needs, where participants can learn through their own experiences and at their own pace.