House Accounts also known as Credit- Line/Charge Accounts were a floral business must have at one time.

In this day and age many florists question if they should offer or continue to offer house accounts to their customers/local business. Most florist Point of Sale systems provide House Account functionality. Offering House Accounts can be risky, however there are many benefits  with extending a credit line to your customers.

In this blog we will outweigh the pros and cons of offering your customers florist House Accounts.

Florist House Accounts – Pros 

• House Account Customers  Spend More 

House account customers pay over time, therefore they are more likely to spend more.

• Gain More Customers

Local business, City Town Hall, Hospital Human Resources Department  and many more  love to team up with flower shops who offer House Accounts as do customers. Extending credit will increase your  business traffic .

• Beat Your Competition

Many florists opted not to offer House Accounts to their customers or local business, this can be a win, win for your flower shop business as customers love the flexibility to pay over time as it allows them to control their finances more efficiently.  Having  charge accounts  available in your florist will help you win more customers thus beating your competitor.

• Boost  Reputation 

Customers feel a sense of trust and comfort in your business when you offer them a credit line. Shows that your flower shop business is financially stable.

• Enhances Social Media 

One way flower shops have been offering credit lines to customers, is by posting contests on their floral business social media. Offering a small credit line to their fans with a discount. This not only works to bring in more sales however also enhances your social media presence.

• Double Your Sales

Allowing for credit lines attracts more sales not just because of all key points above but it also allows your customers to pay over time having them be less worried about price and to order from your flower shop more frequently.

Florist House Accounts – Cons

• Billing Management 

Accounts receivable management will  take a huge part of running you’re  business successfully. You must now spend time sending invoices and statements , apply payments and keep a accurate record of all open credit lines. This may require you to hire extra help or take up more of your free time.

• Delinquent Accounts

With any credit line offered to a business or customer there is always the risk of a charge   account being delinquent, customers who do not pay can equal a loss thus impeding on your business cash flow.

• May Increase Business Debit 

If you are ordering  flowers/supplies on credit in hopes of paying when your house accounts pay you this may increase your debit especially if customers pay you late or become delinquent.

• Possibility Of Loosing Customers

Although a rare occurrence it is good to consider that this is a possibility. Some customers will not pay and the more hassling the more they refuse to be a patron at your flower shop. There are also some who become offended when charged late fees.

Is it wise to offer credit lines to your customers ?

This is solely your decision as a flower shop business owner. For me personally I have had much success with house accounts as they were my best customers,  this is not always the case for florists who extend credit.

If you are on the fence, here are some tips to get you started.

1. Start with business credit lines first. This will allow you to get the hang of account receivables and see if your cash flow is affected in any way while waiting for your business customers to pay their account.
2. Keep a customers credit card securely on their account as a backup.
3. Have a good Florist POS House Account billing software, I understand I’m bias here, but honestly it is super important to have a great florist specific accounts receivable software. This will do most of the work for you.  Doing it without a florist accounts receivable software will be a tedious job and sometimes more trouble then its worth.
4. Be choosy! Offering credit lines to your customers is your choice therefore not all are created equal, choose the customers you would like to offer credit lines too wisely. Start off with a minimum  credit line and increase as you see they make timely payments.
5. Have a written contract with your house account policies, Let customer know in advance the late fee payments and so on. Also make sure this is clearly shown on customers billing statement.

Florists lets hear your feedback, do you think house accounts are important in the floral business? Tell us yay or nay on house accounts.

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