Tip #067 – What to do About Rising Gas Prices

Tip #067
What to do about rising gas prices.

With the price of gas rising every day, what are your options to stay profitable?

Well, the obvious one is to keep raising your delivery charge, but that involves work on your part.  Especially if you have delivery zones with different delivery prices.

So how can flowerSoft help with this problem?  By borrowing a trick from the transportation industry, and that is the fuel surcharge.

A fuel surcharge is an additional charge that gets added to the delivery of goods.  Just about everyone in the transportation industry uses them, perhaps even your own suppliers.  I’m almost certain tha they are getting charged a fuel surcharge from their suppliers and you can bet they are passing it off to you, perhaps disguised as something else.

flowerSoft has had this feature for many years now but, to my knowledge, only a handful of flowerSoft users actually use it.

So, you ask, “How do I implement a fuel surcharge to my deliveries that is automatic and takes very little time from my busy schedule?”

Here is how:

  1. Go to the Manager’s menu, System Information > Defaults > Operating Defaults, enter the shop # and press U to update the defaults.
  2. Navigate to page # 6 and you’ll see the following:

Now change the “Enable Fuel Surcharge?” answer to Y and enter the Reference Price per Gallon.  This is the price you originally based your delivery charges on.
If you want the fuel surcharge also to be applied to incoming orders (from wire services or your own web site) put a Y in the “Deduct From Product on Incoming Orders” field.  Please note that if you enter a Y in that field the fuel surcharge will be applied automatically to the incoming order and unlike local orders, you will not have the option to apply it to some orders and not others.

Once you’ve done this, all you have to do to maintain this option is answer what the current price per gallon is.

Each morning, the first thing flowerSoft will ask you when you first try to enter an order, is what the current price per gallon is.

If you do not enter anything at this point, flowerSoft will use the last gas price entered to calculate the fuel surcharge.  In other words, if the price per gallon was $4.00 when you last filled up you delivery van, you do not have to remember what that price was each day.  If you don’t enter a price per gallon, flowerSoft will assume that the price did not change since the last time you entered one.

Please note that since flowerSoft only displays this message once a day, if you or one of your employees made a mistake while entering the current price per gallon; you’ll have to go to either the Manager’s menu or the Dispatcher’s menu and access the Delivery Charges menu.  From there access the Edit/View Gas Price History option.  Bring up the incorrect entry, press U to update and change it to whatever the gas price should be.

Also note that fuel surcharges are only added to local and incoming orders, never to outgoing orders.

So, let’s say the gas price for today is $4 per gallon.  After you enter 4.00 in the screen above, flowerSoft will display the following message:

This means that flowerSoft will add a line item to your orders that will be equal to 33.33% of your delivery charge.

When you go past the delivery field, flowerSoft will inform you that it is about to apply a fuel surcharge to the order.  This will give you the option to not apply the delivery surcharge to some orders.  Please note that this option is not available if you decide to apply a gas surcharge to wire service and web orders, as the surcharge is applied automatically.

Once you answer Y to the prompt above, flowerSoft will add a line item to the order showing the fuel surcharge, which in this case will be $9.95, your normal delivery charge times .3333 which is the percentage of how much the cost of 1 gallon of fuel has gone up from your reference gas price of $3.00.  This equals $3.32, which is your fuel surcharge amount.

So there you have it, an easy way to recoup the rising cost of delivery.

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