Fuel Oil News

Fuel Oil News - June 2016

The home heating oil industry has a long and proud history, and Fuel Oil News has been there supporting it since 1935. It is an industry that has faced many challenges during that time. In its 77th year, Fuel Oil News is doing more than just holding

Issue link: https://read.dmtmag.com/i/681354

Contents of this Issue


Page 33 of 55

34 JUNE 2016 | FUEL OIL NEWS | www.fueloilnews.com www.fueloilnews.com | FUEL OIL NEWS | JUNE 2016 34 BUSINESS OPERATIONS NEWS BY COLLIN SULLIVAN, NATIONAL ACCOUNTS MANAGER, AVATAS PAYMENT SOLUTIONS I t is no secret that a good percentage of merchants in our industry still mail out monthly invoices and get paid by check net 30/45/60. One of the things I try to do when I speak with these merchants is to help them understand the true costs asso- ciated with processing a check. This way they can make a better decision in deciding whether credit card processing, electronic billing or a different processing solution is right for them. Do you know how much you pay per check? Consider the following. I've put together a basic model that you can use to estimate how much each check is costing you. To help further, I've also included what the calculation would be with a generic oil/gas account. As a note, realize that the model below takes into account only the hard costs that we can readily assess. There are also a number of very real "soft" variable costs that aren't as easily quantified like customer convenience, security, the costs of bad data information being entered, or the cost of mail non-delivery. So what do you do to start? The first thing is gather some information on your end. This is the information that will feed the calculation. As with everything, the better information you put in, the more accurate your results will be. If you can't get some of the information, just use the numbers we have from our model to get a basic cost. WHAT YOU NEED TO GET: Customer information: 1) Average Ticket: What is the average ticket amount for each of your deliveries? 2) Payment Terms: Are your terms net 30/45/60 or something else Labor information 1) Labor Rate: What is the hourly labor cost for the people who print, stuff, mail, receive, and enter payments when the checks come back. Make sure to include benefits, Social Security, and Medicare. 2) Man Hours: The time that it takes your team to take care of one bill for one account. Include time it takes to print, stuff, and mail out the bill and the time it takes them after the check comes back to open the mail, enter the information. Material and shipping costs 1) Printing and material costs: This should include the costs for printing the statement as well as any costs for the envelope and the return mailing envelope. 2) Postage: How much it costs you to send the bill and any pre-paid business reply postage Side by Side Cost Comparison: Paid by Check vs. Paid by Credit-Card If you don't know the cost of customer checks, it's good to find out

Articles in this issue

Links on this page

Archives of this issue

view archives of Fuel Oil News - Fuel Oil News - June 2016