|
Cores: seven rules for managing cores
continued from
Hot tips
<BACK
2) Never issue core credit until you actually receive the core.
Do you issue credit for returned merchandise that has not yet been returned? Of
course not. The same should be true of your core business. Cores are money.
Cores should be charged when the repair/exchange item is billed and credited
only when the core is actually returned.
3) Never allow customers to over-return cores to you.
Core credits should only be issued if you sold the core in the first place. If
you allow customers to return cores that were not purchased from your
dealership/distributor, you probably cannot return the cores to your supplier.
Cores are then out of control and you lose money.
4) Track inventory of “dirty” (returned) cores.
Without tracking dirty cores, you really do not know when you have problems.
Tracking dirty cores will tell you when you need to buy cores, and when you
need to sell cores. It stresses to everyone in your company that cores are
worth money.
5) Track cores to customers using the same rules as your suppliers.
Every supplier has their own core rules. Some suppliers track cores by part
number, some by product model and some by core class. Some suppliers allow
return of broken and damaged cores and some accept only good cores. Your
suppliers’ rules should be applied to your customers.
6) Never over-return cores to your suppliers.
With rare exceptions, suppliers will not give credit for over-returned cores.
Therefore, if you send cores back to any supplier over and above the cores owed
to that supplier, you will rarely, if ever, receive credit. Since most
suppliers will not issue credit for over-returned cores, returning more than
you owe is really a core donation to the supplier.
7) Establish “cores only” accounts payable accounts.
For suppliers that allow you several days to pay for cores, it is often a good
idea to establish a “cores only” accounts payable account. This will allow you
to monitor the dollars of unreturned cores for which you will be required to
pay if cores are not returned.
Quite often there is a cash payoff in buying cores from customers at market
price (typically lower than your supplier’s charge) and then using these low
cost cores to reduce or eliminate your supplier’s core charges.
As you can see, cores do not have to be bad news. A painful situation becomes a
profitable one when good core control methods are established and enforced. To
ignore cores is to deny increased profits for your business. Ignoring cores
only makes your profit go away. The cores will still be there...demanding your
attention.
<BACK |
