Tips for the Manager

You bought the system to be used . . . SO USE IT. Whenever possible, eliminate superfluous paper records and use the computer to keep track of things.

A few examples . . . keep all customer information in the system, use the "notes" and "reminder" features regularly, work from the screen rather than printed lists if possible, and stop using post-it notes and the backs of envelopes to keep track of stuff.

This will help to bring order to the typical office clutter and disorganization and is a key first step to a well run office. People like to keep paper records (security blanket?) but unless it's legally required, it's best to get rid of all unnecessary files. Do this religiously.

In particular, every account should have the following information recorded:

Bad information is very often worse than no information at all. So keep all the data in the system accurate and up-to-date . . . every day.

Staying on top of things is key to maintaining an orderly office. This means doing today's work today and not letting work pile up. Specifically, you should:

It's critically important that the information in your system is accurate and up-to-date . . . especially your financial information.

Maintaining good control procedures will insure that the system is kept in balance and that all entries are done correctly.

See Control Procedures for detailed help on how to do this.

Work your worst credit customers every day by doing the following:

Bring up the screen that shows your worst paying customers (left-click on "Customers", then left-click on "View 90 Day Past Due Accounts"). These will be sorted so that the ones who owe you the most money are at the top of the list.

Note: After you have worked the "over 90 day" accounts, you can them move down to the "over 60 day" accounts and begin working them (left-click on "Customers", then left-click on "View 60 Day Past Due Accounts").

Work down the list from top to bottom.

Before calling each one, review any collection notes and/or reminders to see what the status of the account is.

If you call them, record the date called in the system.

Add a collection note and a reminder (if appropriate) describing the results of your call ("no one answered", "left a message", "promised to pay by X date", etc,).

Make it a point to call as many as you can (say 10 a day).

Remember that delivering to bad credit customers is costing you money. To minimize this:

1. Establish firm policies on how to deal with bad credit customers, such as:

COD only after they are delinquent for 30 (or 60 or 90) days

Half pay of back bills and COD thereafter

Payment arrangements in place with your office before delivering

2. Let Lynx help you monitor and enforce these policies:

Use the system to help you set up your deliveries for the day (or week)

Review the Route screens (they're even color coded for easy reference) to identify bad credit customers

Schedule your deliveries in accordance with your credit policies

3. Insist that these policies are understood and enforced by all office personnel and all drivers.

Off-route customers are those (usually "Will Call") who habitually require emergency deliveries. This is both expensive and disruptive since it interrupts smooth route scheduling. To minimize the impact of these situations:

1. Establish firm policies on how to deal with off-route customers, such as:

No deliveries

COD only

Add a surcharge to each delivery

(Best) Switch them from "Will Call" to "Keep Full"

2. Let Lynx help you monitor and enforce these policies:

Use the system to help you set up your deliveries for the day (or week.)

Review the route screens to identify will call customers

Chec their delivery history to identify habitual problem situations

Schedule your deliveries in accordance with your off-route policies

3. Insist that these policies are understood and enforced by all office personnel and all drivers.

If your objective is to keep your delivery costs down, it's best to get rid of as many "Will Call" customers as possible. This is because it's only when you control your delivery schedules that you can manage your costs. Here's how to do this:

1. Use Lynx to identify your Will Call customers.

2. Contact each one and explain the advantages of not having to worry about propane deliveries by letting you schedule their deliveries

3. If they insist on remaining Will Call customers, consider the following:

4. Add a surcharge to each delivery to help offset the disruption cost.

5. Send them to another dealer. This may sound drastic, but it's better than consistently losing money on deliveries. Let the other guy lose money.

Note: Sometimes there are special considerations that require a customer to remain a "Will Call" but these should be kept to an absolute minimum. This is important because "Will Call" customers almost always add to your expense and reduce your profits.

This is the most obvious first step but too often is not done accurately or often enough.

1. Every month, run "Yard Tanks Report" (left-click on "Tanks", then left-click on "View Yard Tanks and Equipment", then left-click the "Reports" button). Use this to take a physical inventory of the tanks in your yard. When you're done, resolve any discrepancies and bring the computer records up to date.

For help on this see Print Tank Reports. 

2. Make sure every account record in the system has a tank(s) assigned to it, including the serial number. If this information is missing, have the driver get it on the next delivery.

3. Every month, run Report TR-02 ("Tank List by Tank Size") selecting only company-owned tanks for all accounts (including the Yard Account, which is usually 0). This will give you a listing of all your tanks by size, including where each is located. It will also give you totals by tank size and a grand total of all tanks for all sizes.

4. The grand total from this report represents a "control total" of your entire tank inventory.

5. You can verify this "control total" if you have a Tank Card File. Go through each card and match it to each tank on the "Tank List by Tank Size" report:  

• If they are exactly the same, you can be sure that your computer records are accurate.
• If there are differences, research why and correct either the Tank Card or the appropriate computer record.

6. This "control total" of all your tanks should be adjusted:

• When you buy new tanks, it should be increased.
• When you sell, destroy, or other wise get rid of tanks, it should be decreased.

7. Repeat this process monthly to keep your tank records accurate and up-to-date.

It doesn't do much good to spend a lot of time optimizing your deliveries if the tanks you're delivering to are the wrong size . . . either too big OR too small.

If they're too big, you have money tied up in tanks that are not paying for themselves with adequate volume.

On the other hand, if any of your tanks are too small, then you're making excessive deliveries (and incurring unnecessary expense).

EITHER WAY, YOU'RE LOSING MONEY!!!  

To correct this and to make sure every tank is the right size, do the following:

1. Run Report TR05 ("Delivery Frequency Report"), selecting all accounts for the past year with any number of deliveries (say from 0 to 999).

• For help on this see Print Tank Reports.

2. This will show you all of your tanks sorted from least number of deliveries to most. What you're looking for are those at each end of the report. That is, you want to identify those tanks which have had too few deliveries (those at the beginning of the report) and those that have had too many deliveries (those at the end of the report). These are the ones that are costing you money.

• For those tanks where you have made too few deliveries (like only 1 or 2), make arrangements to install a smaller tank.
• For those tanks where you have made too many deliveries (like more than 5 or 6), make arrangements to install a larger tank.

3. Run this report at least monthly and keep swapping out tanks. The idea is to work from both ends of the report towards the middle until all of your accounts (within reason) are getting roughly the same number of deliveries per year.

Note: It may not be possible to change every tank to the right optimal size. Routing considerations, unusual usage patterns, space constraints, and public relations concerns might prevent it. However, this doesn't change the overall objective. Remember, every tank that is not the "right" size is costing you money and negatively impacting your cash flow.

For accounts with only one tank, all deliveries will automatically be posted to the correct tank.

However, if there are multiple tanks assigned to an account, it is crucial that each delivery is posted to the correct tank.

If they're not posted correctly, the system will be unable to accurately calculate deliveries and help you do your routing.

In addition, analytical reports (like the report TR05 "Delivery Frequency Report") will be wrong.

In other words, this is a classic example of the so-called "GIGO principle" (Garbage In Garbage Out). If you take care in posting your deliveries, the system will be of great help in making you more efficient. If you don't, the system will simply not be able to help as much.

Use Lynx to help you set up your routes:

1. Decide on each of the general geographic areas to be included in each route

2. Display a map of your customers in the first area (this should be limited to about 60-90 customers)

3. Define the route on the map.

4. Use the system to identify each stop

5. Make sure the sequence of stops makes sense

6. Repeat this process for each route

Lynx gives you seven different routing methods that can be used for each tank:

See Overview of Routing Methods for a more in depth look at routing methods.

Degree days . . . typically used for heating accounts.

Gallons per day . . . typically used for appliances (like water heaters) with constant usage.

Degree days and Gallons per day . . . a combination of the two above. For instance, this method might be used if a customer has both a water heater (where usage is consistent and Gallons Per Day is the best way to estimate usage) and a heating appliance (where Degree Days is more appropriate).

Interval . . . typically used for commercial accounts where usage is difficult to determine and a repetitive pattern (like every week) is necessary.

Julian date . . . typically used for swimming pools where the day of the year is the best way to determine usage.

Driver Number of Weeks . . . The driver chooses the number of weeks until the next delivery. Typically used for new accounts (where there is limited history of usage) until enough deliveries have been made to allow the system to route the deliveries.

Day of the Week . . . This method allows you to deliver on a fixed schedule per week, such as every Monday and Friday.

Note: Every propane company is different in how they use these methods. None of these is necessarily the "best" way to route. In fact, you might want all of your accounts to simply be routed by Driver Call, which is how a lot of companies operate. However, the other methods are also available and should be considered as your routing gets more sophisticated.

Here's how to use Lynx to measure how "efficient" your routes are:

1. Run Report DR02 ("Delivery History") for each of your routes.

• See Print Delivery Reports for help on this.

2. Check the "Efficiency Rating" for each stop.

Note: This is a number based on the gallons delivered calculated as a percentage of 85% of the capacity of the tank.  The higher the number the better.  In other words, "small" deliveries (like delivering 10 gallons to a 100 gallon tank) produce small efficiency ratings.  Conversely, large deliveries (like delivering 75 gallons to a 100 gallon tank) produce high efficiency ratings. 

3. The efficiency rating of each stop should be at least in the 50-60% range (or higher).  

4. If they are lower than that, check the following to see where the problem lies:

• Is the tank is the wrong size?
• Are they are a Will Call customer?
• Is the wrong routing method being used?
• Is the driver is making poor delivery decisions?

5. Correct the problem.

6. Keep monitoring the efficiency rating of all your accounts until they all get to an acceptable level.

Budget payment plans offer several advantages to both you and your customers:

For the customer, making budget payments is often easier than large single payments, thereby reducing overdue situations for you.

For you, budget payments even out cash receipts during the year, thereby leveling the ups and downs typically associated with fluctuations in the weather.

In addition, being on a budget plan reduces the probability of a customer jumping to another supplier.

For help on this, go to Set Up Budget Payments for an Account.

Lynx also allows you to View Budget Customers, to View Late Budget Customers, to Print Budget Payment Reminder Letters, and to Print Budget Payers Lists.

Tank rent is typically set up on a yearly basis and comes due based on when the tank was first set or when the account was first set up. The problem with this is that tank rent payments are then scattered throughout the year on an irregular basis.

To help out with the cash flow problem, schedule ALL of your tank rent for May-June. Doing this will bring in the payments during the summer when cash flow is typically at its worst.

See How to Handle Tank Rent for help on this.

Managing cash flow means (among other things) managing people who owe you money, especially if they're in the over 30, 60, or 90 day category. Lynx gives you several tools to deal with past due customers.

Make it a point to contact past due customers EVERY DAY.

Use the system to View 90 Day Past Due Accounts first since they are the most delinquent. This will show you the worst credit problems ranked by amount owed. Start here and work the Over 90 Day category religiously.

Next, move down to View 60 Day Past Due Accounts and do the same.

Then View 30 Day Past Due Accounts next. Record the contacts in the system and follow up (if a payment was promised but not received, call back).

In addition, it's a good idea to also send out past due letters. These add further emphasis to any phone contacts and can be customized to include whatever wording you think is appropriate. See Print Custom 30/60/90 Day Letters for help on doing this.

It doesn't do much good to spend a lot of time optimizing your deliveries if the tanks you're delivering to are the wrong size . . . either too big OR too small.

If they're too big, you have money tied up in tanks that are not paying for themselves with adequate volume.

On the other hand, if any of your tanks are too small, then you're making excessive deliveries (and incurring unnecessary expense).

EITHER WAY, YOU'RE LOSING MONEY!!!  

To correct this and to make sure every tank is the right size, do the following:

1. Run Report TR05 ("Delivery Frequency Report"), selecting all accounts for the past year with any number of deliveries (say from 0 to 999).

• For help on this see Print Tank Reports.

2. This will show you all of your tanks sorted from least number of deliveries to most. What you're looking for are those at each end of the report. That is, you want to identify those tanks which have had too few deliveries (those at the beginning of the report) and those that have had too many deliveries (those at the end of the report). These are the ones that are costing you money.

• For those tanks where you have made too few deliveries (like only 1 or 2), make arrangements to install a smaller tank.
• For those tanks where you have made too many deliveries (like more than 5 or 6), make arrangements to install a larger tank.

3. Run this report at least monthly and keep swapping out tanks. The idea is to work from both ends of the report towards the middle until all of your accounts (within reason) are getting roughly the same number of deliveries per year.

Note: It may not be possible to change every tank to the right optimal size. Routing considerations, unusual usage patterns, space constraints, and public relations concerns might prevent it. However, this doesn't change the overall objective. Remember, every tank that is not the "right" size is costing you money and negatively impacting your cash flow.

Lynx is designed to be fast and easy to use. If you use the system correctly, this alone will help you minimize the size of your staff, especially if you have good office discipline. If you follow the tips outlined above, this should also minimize the number of drivers you need.