Floor planning is a special type of financing offered by lenders. Retail floor planning allows dealers the flexibility to offer the right product mix for customers to choose from. For example, dealerships for automobiles, recreational vehicles, and boats, as well as home goods retailers will turn to floor plan loans to purchase inventory.
Floor Planning Explained
Floor Plan financing is especially useful in businesses that are required to pay their suppliers in a shorter period than it typically takes them to sell that inventory to its customers.
Floor planning provides a solution to seasonal fluctuations in cash flow and enables a business to achieve higher sales volumes - just think about all of the extra inventory you build up to have a successful holiday season.
Floor planning is very similar to consignment, except that you take possession and own the inventory when you receive it, but you don't have to pay for it until it's sold, or until it's been in the store for a negotiated period of time.
However, you do own the inventory and have to pay for it sometime. Some floor planning companies want the ability to check the inventory serial number by serial number for the larger items, and others may just want to count the number of each model number on hand.
Floor Planning for Success
Effective floor planning for high-value items is critical to the success of any dealer. If you have too much product, or worse yet, too much of the wrong product, you could get buried in financing.
You need a method to keep up with the due dates to avoid excessive interest charges.
Windward System Five can handle it for you. On the accounts payable side, you will be able to keep track of who you owe the money to (Floor Planning Company) and who you actually bought the inventory from (Supplier) and generate proper histories of each.
Windward's built-in floor planning finance module allows you to set up inventory financing with:
- Manufacturers
- Distributors
- Financial companies
With an optimized inventory, you can keep up with your financing obligations, while ensuring a continual product turnover so that your inventory doesn’t stagnate. You continue to win over Happy Customers.
Windward System Five is packed with features that keep you organized so that you can spend valuable face time with your customers.
Check out How to Know When It's Time To Implement an ERP.
If you are ready to learn more about Floor Planning, here’s what to do:
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Windward clients please contact your Account Manager to talk about a Professional Services plan to get Floor Planning set up. +1 (800) 633-5750 |
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Or you can start by checking out this webinar where we will discuss what floor planning is all about. We will cover the setup and configuration of floor planning in the System. There will be a live demo with examples and a quick Q & A will follow.
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This Windward Solution Series video covers the Floor Planning process in depth. For more Solution Series Videos please consider subscribing.
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If you are not yet a Windward client, one of our Business Developers would be happy to talk to you about your current business challenges and see how Windward System Five can help.
Please reach out at +1 (800) 633-5750
or
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