Edition #25

At least a couple of times each month, I talk with customers who have been hit with chargebacks because they (or someone at their company) unknowingly took a stolen credit card. So although I have mentioned this in the past, I thought I would give another reminder that flooring dealers are being victimized, and you need to protect yourself. If you take a stolen credit card, and release the product, you are liable for the chargeback.

The basic scenario we are seeing is that someone calls and needs material. Often the story is some variation of them working on a job and running out of flooring and needing some fast. They pay with a credit card over the phone, and then say they will send their guy to pick it up. The card appears to go through, the material is picked up, and it’s only later that the bank notifies you that it was a stolen credit card, and that you are on the hook for it.

The thing that makes it tricky, and the scam so effective, is that it could take some time before you find out it was a stolen credit card. If the owner of the credit card quickly realizes and reports the theft, it is a relatively short time. But if the card holder is not paying close attention, it could stretch out as long as a month or so.

So let me stress once again that if you are doing any sort of cash and carry sales of inventory, it is critical that you know who the customer is. Or, if you do not, in order to protect yourself, you need to very carefully vet out the customer and order, to ensure you are not dealing with a stolen credit card.

A few ways to do this is:

1. Have the customer come into your store in person, and make sure their ID matches the name on the credit card.
2. If they won’t come to you, offer to go meet them in person, so that you can get their ID and needed signatures. For a $10,000 cash and carry deal, you should be willing to do some driving in order to protect yourself. If they are out of town or make up some excuse, be extremely cautious.
3. You can offer to meet up over Zoom or Facetime. During the call, have them show you their credit card and ID, and make sure everything matches up.
4. Make sure the zip code that is tied to the credit card is within your general area, and that it is tied to the customer or the jobsite. If it is an out of area zip code, be suspicious.
5. You can also call their bank (the number listed on the back of the card) if you are unsure. The bank will sometimes call the customer to validate the charge and card.
6. If someone is giving you more than one credit card, be wary.

Along those lines, we’ve noticed an increase of fraud attempts on our QPay website, where people are trying 4 or 5 different credit cards until they find one that works. The QPay virtual terminal displays all of the card “failures”, so it can tip you off to someone trying electronically to use stolen credit cards or numbers.

I realize we’ve talked about this quite a bit, but we’re still seeing dealers losing money over this same scam. So we just want to be sure that the word is out and that you protect yourselves. If you have any questions, feel free to reach out.

We constantly receive questions from all of our new QFloors clients, as well as a large number of existing clients, about sales tax applications in their state or Canadian province. (By the way, Canadian companies can set up our sales tax system to properly charge or accrue GST, PST and HST.) Many of our clients are not administering and/or reporting sales and use tax properly according to the laws of their state. Some continue to do it the way they have always done it. “That is the way we were taught to do it 20 years ago and we’re not changing,” they say.Fortunately, most customers, even those who might have inadvertently been doing it wrong in the past, take our advice to verify the proper application of sales tax with a qualified tax attorney. But however you choose to administer sales tax in your business, we will help you set it up the way that you want it.

I would recommend that you review your state’s tax laws. Many of them have changed in the last 5 years because of the South Dakota v. Wayfair decision. As it stands today, 5 states have no sales tax at all and 6 states require sales tax only and no use tax. That means that 39 states require use tax be administered to at least some of your floor covering sales. Many of you may be thinking, “Sales tax I know, but what is use tax?”

Let me start by describing the different types of sales that may have different tax implications in your state:

• Material Only (Cash & Carry): As you all know, when you sell material out the door with no installation component, you are engaging in a retail sale and every state (except the 5 no tax states) requires you to charge sales tax to your customer and remit that whole amount back to the state.
• Installed Sales: Most of the jobs we do fall into this category. If you are in one of the 6 states that have only sales tax laws, you will still be charging your customer sales tax – either on the material only, or on the whole invoice including installation charges, depending on the state and the type of sale. If you are in one of the 39 states that have use tax laws, you won’t be charging your customer sales tax but you will be paying a ‘use tax’ to the state.

So let’s take a step back and define use tax. Use tax is simply a sales tax on you(r)–the dealer’s– cost of materials. Some of you pay this tax to your product vendors when you buy products. Indeed, many states encourage/require you to pay your use tax in this manner. The rest of you purchase your materials tax exempt from your vendor and accrue and pay a ‘use tax’ when those materials are used on installed jobs.

You may be wondering, “As a retailer, why would I be subject to use tax? Shouldn’t I be charging sales tax to my customer on everything I sell?” The reality is you are both a retailer and a contractor. You are a retailer when you sell material only (cash & carry sales), but you are a contractor when you agree to install the material for your customer. When you permanently attach (install) the floor (through employee or subcontractor installers, it doesn’t matter) for a customer, you are deemed the ‘end user’ of that tangible personal property. As the end user of the product you must pay sales tax on the wholesale cost of the product (aka use tax), not sales tax on your customer’s price.

If you have arranged for your vendors to charge you tax, they will remit the tax they collected from you. Does that mean you don’t have to report or pay any more tax to the state? No, you still have to send a sales tax report to your state, and you will also report and pay tax on a portion of your material only sales. Remember, you still charge your cash and carry customers a sales tax on their retail price, which is higher than your wholesale cost that you have already paid tax on. So, you just have to pay tax on the difference between your wholesale cost and retail price on cash and carry sales. And yes, our QFloors sales tax report gives you these totals to fill out the state form properly.

Special Situations:

• Different Flooring Materials – Most use tax states treat all flooring materials that are attached to the floor (installed) as a use taxable material. But some states have determined that products like, for example, tack and pad carpet installs can be easily removed and taken out of a structure and reused somewhere else and therefore not permanently attached and therefore not a material subject to use tax, but instead must be charged and remitted as a retail product. Go figure.
• Different Job Types – Some use tax states require sales tax to be charged on Commercial Jobs or New Construction jobs, etc.
• Reporting Requirements by Installation Location – Many states require contracting businesses that install (use) products outside of their city, to report sales and/or cost of materials used in the destination location, city by city. QFloors has a Sales Tax Rate Table to type/import each city in QFloors. These different rates will apply by city as the city is selected on the sales order screen.
• Reporting Requirements for Different States – If you do installations in multiple states, you should be filing sales tax reports in each of those states. Also, it is very important that you be exempt from tax with your vendors so that they don’t charge and remit tax to your home state. Because you have to report installed sales and pay a full use tax to other states.

In some of these situations, you will need to set up multiple tax strategies in our Sales Tax Setup screen. Have our support department help in these instances.

No matter how your business administers sales and/or use tax, QFloors can dramatically reduce the time and work required, and help ensure you are not paying too much or too early.

We have a set of procedures you should be familiar with in order to make sure you have accurate financials. Are you familiar with our End of Period Procedures? We call them End of Period Procedures not End of Year Procedures because you can do them more often than just once a year.

The full instructions for End of Period Procedures* are more detailed and tell you what to do if you have a problem. There is a similar document called End of Period Short Procedures*. They are the same procedures but less detailed. If you run into a problem they point you back to the full End of Period Procedures.

*Important note: you must be logged into the support site to view these instructions/links.

We recommend going through our full End of Period procedures if you have never done them or if you only do them once a year. If you are pretty comfortable with our End of Period Procedures and you do them more often than just once a year you can use our End of Period Short Procedures.

Be sure to read through the procedures before doing them. There are two that you need to make sure you do before the end of the year – Inventory reconciliation and Contract Labor Payable reconciliation (if you use that feature).

I have outlined the following steps just to get you started. This is what I would say and walk you through if I was on the phone with you. This is not meant to replace the full End of Period Procedures document.

The First Step:

The first step to all of the procedures is to make sure you are caught up on Job Costing.

The best way to sort your screen to make sure you are caught up on Job Costing is in Sales screen > Inprocess All > All Dates and All Locations if you have more than one. I like to sort that list by the date to bring the oldest to the top. This should be a list of all of your sales that are truly still in process. If you see anything old or that should not be there it may need to be Job Costed or cleaned up.

Step Two:

Make sure you look at your Proposals list with > All Dates and add the Payment column. Sort by the payment column to make sure there are no proposals with payments. If a customer paid for something it should probably be changed to an Order.

Step Three:

Double check your Receivables list with > All Dates as well and make sure this is a list of customers that still owe you money. Clean up these lists as necessary and call with questions.

Step Four:

When looking at your Materials screen there is some cleanup that needs to be done before you can complete the Inventory reconciliation procedure. Look at each list in the Materials screen. POs should be a list of things that need to be ordered; they haven’t been ordered yet. On Order should be a list of things that are actually on order. When a truck comes in you should go straight to your On Order list to receive into Stock.

Step Five:

The No Bill list should be a list of materials that we are just waiting for a bill on. If we just placed an order and have not received the bill yet, that’s okay. But if there is something old, that needs to be cleaned up.

We do have instructions on our website for No Bill Cleanup and Inventory Balancing to help you see why there may need to be some adjustments. You should not have to do No Bill Clean up every year. Be sure to call us with questions if you are not sure how to clean something up or if you just want to make sure you are doing it correctly.

Step Six:

Do a Physical Inventory Count. Then clean up the Stock list to make sure it reconciles with your physical count. Inventory reconciliation can be a large task and can take some time.

Step Seven:

The Bills screen Current Bills list should be a list of bills that are still due. Sort by Current Bills>All Dates and bring the oldest to the top. There may be some old bills that need to be cleaned up, zero bills, or even blank bills. As always, call for guidance if you are not sure what you are looking for or how to clean it up. This is an area where we really want to be mindful of the accounting.

Step Eight:

As you work through each of these steps there are tools to run. Our End of Period Procedures explains how to run the tools and what dates to use in these procedures. Running the tools does not change or finalize anything in the accounting. They are simply helpful tools to help you make sure everything is running smoothly in your software. These tools will point out a problem if there is one. Follow the detailed instructions for the tool to help find and fix the problem. Sometimes it’s a simple refresh and sometimes you need to get us connected.

Step Nine:

Make sure you have reviewed both the Sales/Use Tax Payable and the Contract Labor Payable reconciliation instructions listed in the End of Period Procedures document. As always, call with questions.

Step Ten:

Last but not least, Close the Period. Do not be afraid to Close the Period – it does not change anything in the accounting or make it so you can’t see it. Closing the Period simply protects things from accidentally changing. If you need to change something, you still can. You should close the period as soon as you are ready to print the financials for your accountant. That way nothing will accidentally change from when you print your reports and when your accountant gives you any adjusting entries. You can open the period back up if you need to.

These are my End of Period Procedures in a “nutshell” just to help you get started. This is not meant to replace the full End of Period Procedures document. Be sure to read the full Procedures and call with questions. Do not get overwhelmed by the lengthy document but call for help so we can break it down into smaller tasks and give you “homework”. I recommend running through these procedures more often than just once a year. Make running the tools part of your monthly procedures.

Earlier this year we added a new Client Success division at QFloors. The goal for this new team is to be a proactive partner, focused on assisting with successful Premium Implementation, Satisfaction, Retention, and Growth. Our priority is your ongoing success and satisfaction. We hope to be the best possible partner, by providing excellent support and follow up, and by being attentively tuned in to your needs and goals.

We will actively work with new premium customers on a successful software implementation, ensuring they achieve the desired outcomes and gain maximum value from all QFloors products and services. We will be proactively engaged, providing continuous support, and working together with our amazing Client Services and Sales teams in assisting our new and current QFloors customers. Our goal is to help customers achieve the outcomes they seek, leading to long-term business relationships and mutual success.

All new customers have the opportunity to take advantage of our *NEW Premium Implementation product. When you choose our Premium Implementation, you’ll receive personalized, one-on-one assistance from one of our Client Success Consultants. They will be responsible for guiding you through all of your basic setups, facilitating successful accurate entry of your price lists, vendors, labor types, customer accounts, etc. They’ll work with you to schedule and help coordinate the necessary training with a member of our Client Services Team, ensuring you get off on the right foot with your new QFloors software.

If you are a current customer who recently purchased, and you’re struggling to find the time to get your new software off the ground, don’t worry, with your commitment, and our expertise in the process of implementing QFloors software, we can help. Please give us a call and a member of our Client Success team can discuss with you how to get this box checked off your list, so the software can start helping you manage your business as you focus on growing it.

Our Client Success team looks forward to working with new and current QFloors customers alike, and we’re excited to build new relationships and grow existing ones. As we grow our new team, it will allow us to proactively check in regularly, doing all we can to make sure you have what you need and that you are using your software (and all of the other QFloors tools) to their fullest potential.

Our goal at QFloors has always been to help you build a successful business, and our new Client Success team hopes to become an indispensable partner in that effort.

At QFloors, we’re dedicated to providing flooring businesses with the tools they need to succeed, especially in a down-market. Our features are designed to not only streamline operations but also enhance profitability. Don’t just take our word for it—read how our customers have seen tangible results by using these features.

1. Visibility through Job Costing and Reporting: Keeping Your Projects Profitable

Keeping an eye on profit margins is essential in the flooring industry. With QFloors, you gain access to real-time insights into your job costs, helping you to avoid underpricing and ensure every project remains profitable. Brad and Kerry Lenz from Rice’s Capitol Carpet emphasized how QFloors has given them peace of mind. They can now easily pull reports at any moment and make critical business decisions based on accurate, up-to-date data, improving their overall financial management.

2. Real-Time Inventory Management: Control Your Stock, Increase Profits

Inventory mismanagement can lead to costly overstocking or stockouts. QFloors’ real-time inventory management system tracks your inventory down to the smallest detail, ensuring that you always know what’s in stock. Brad and Kerry also highlighted how their inventory has “never been cleaner or more accurate” thanks to QFloors. By utilizing stock they already had, their business has saved money and reduced waste, directly adding to their bottom line.

3. Lead Tracking: Building Lasting Customer Relationships

Managing customer data is crucial for retaining clients and boosting sales. QFloors’ Lead screen enables flooring businesses to efficiently track customer interactions, manage leads, and follow up on opportunities, resulting in better customer service and more repeat business.

4. QCloud Mobile Access: Flexibility on the Go

In a fast-paced industry, having access to your business information anytime and anywhere is vital. QFloors’ mobile access ensures you can manage customer data, check inventory, and make updates even when you’re not in the office. Janka White from Floor Dimensions called the freedom to work from anywhere “life-changing.” Whether on-site or away from the store, she can stay connected and make decisions quickly, ensuring smooth operations and quick responses to customer needs.

5. QPay Payment Processing: Quick, Secure Transactions that Close Deals Faster

Speed and convenience in payment processing can often make the difference in closing a deal. QPay, QFloors’ integrated payment processing system, enables businesses to collect deposits and balances quickly and securely. Blake Merrell from Castle Floors shared how QPay helped their team close sales faster by allowing customers to make payments easily, without having to come into the store or deal with phone tag. This convenient system not only speeds up the transaction process but also boosts overall sales conversion rates.

QFloors is more than just a software solution—we’re a partner in your business’s success. By using QFloors, you’re not only investing in cutting-edge technology but also in your future growth and stability. Let QFloors help you streamline operations, improve customer relationships, and ultimately boost your profitability, so you can focus on what you do best: running your business.

Before we get into this article I just wanted to make a few quick announcements:

1. Our email provider, Zoho, is requiring that we verify some of our customer emails. So in the next month, you may be receiving an email asking to verify your email address for our communications. If you can just reply to that email stating that that is your correct email address, it would really help us. It’s essential so we can communicate important information about updates, outages, and more. Thanks!
2. We’re excited to announce that our QPay credit card processing product is in the running in Floor Trends’ 2024 Top Flooring Products Awards in the Software/Technology category. If you’ve enjoyed QPay’s Pay Now and Surcharging features, can you PLEASE take a moment to cast your vote? You can vote here. We appreciate your support!

Let’s Talk AI Search.
Is SEO Losing Its Power?

As a marketer, one of the most common questions I get asked is: “Are you worried SEO (or search engine traffic) is dying because of the rise of AI search tools/chatbots?” I’ll admit, when I saw ChatGPT AI chatbots taking flight, Google announcing more AI generated previews in its search engine, and the announcement of SearchGPT (ChatGPT’s new AI search engine that’s in development), I got a little nervous. If you’re like me and your business heavily relies on website traffic, it’s scary to hear rumors that organic search traffic is facing extinction.

I decided to do some research on my own. After doing so, I’ve realized that ChatGPT still has a ways to go to dethrone Google, and that AI search is often overhyped. While the search landscape is changing, it’s not going to be immediately overthrown.

Here are my takeaways:

1. ChatGPT has not replaced Google (yet).

While more people are starting to turn to ChatGPT and AI chatbots for answers, the majority of people are still using Google’s search engine. As of August 2024, in the last 30 days there were 260.2 million visits to ChatGPT while there were 82.1 billion visits to Google search. (Source: https://explodingtopics.com/blog/chatgpt-users)

So while ChatGPT is growing, it’s not going to replace Google immediately. ChatGPT did announce that they’re coming out with their own search engine, SearchGPT, which could make things more interesting. But there is still much development that will need to be done to have it even come close to competing with Google’s extensive search engine.

2. AI Is Still Not Always Accurate.

Don’t get me wrong– it’s fun to ask Google’s and ChatGPT’s AI for answers. But recent research is showing there is a high amount of inaccurate information that’s being generated by both parties. According to a recent study, 52% of ChatGPT answers contain incorrect information. (Source: https://arxiv.org/abs/2308.02312) Another study stated that ChatGPT agreed with incorrect statements up to 26% of the time. (Source: https://uwaterloo.ca/news/media/large-language-models-validate-misinformation-research-finds ). Users have also reported incorrect information coming from Google’s AI overviews. (Source: https://www.technologyreview.com/2024/05/31/1093019/why-are-googles-ai-overviews-results-so-bad/ )

3. SEO is not dead.

Some argue that because more people are starting to use ChatGPT’s chatbots and Google’s AI-generated overviews, that SEO is dead. They think fewer people will want to go to websites for information and that organic traffic as a whole is going to take a huge hit. What they fail to realize is that chatbots and AI overviews generate their answers from content that’s on the web. The more high quality information you have on your website about your business, the more likely AI can pull from it and direct people to your site.

Here’s a recent search I did. You can see that Google’s AI overview is listing additional websites and information that people can click on for more information.

Additionally, as stated above, Google isn’t going anywhere and there are still billions of searches happening every day. People are still researching websites on search engines, and most businesses haven’t been reporting a huge dip in organic traffic. Even with our websites, we’ve actually seen an increase in organic traffic when comparing our numbers to last year.

Yes, search is changing and coming out with new AI technologies. But I don’t think it’s going to replace or reduce organic search yet. As it evolves we may need to adapt our SEO (search engine optimization) strategies, but I think there will always be opportunities to lead people to our websites on the web.

What Dealers Can Do Now

Although AI hasn’t taken over the world yet, there are a few things dealers can do now to start adapting to these new technologies.

1. Diversify your online presence. Because people are searching for products and services in a variety of ways, it’s important that your flooring business has a strong presence on multiple channels. Ensure your business can not only be found on Google search results, but also on multiple social media platforms (Facebook, Instagram, Pinterest, TikTok, etc.), Google Maps, Bing Places etc. The more you can establish your online presence, the more it signals to Google and AI chatbots that they can use your business and content as a resource.
2. Optimize your website content (the right way). Gone are the days where you would keyword stuff your website content with a bunch of keywords you wanted to rank for. Right now people are utilizing AI to generate a bunch of mediocre written content for their websites. The truth is, Google isn’t going to feature content that is just okay. They want to feature the best resources with the best information. In light of that, I recommend going against what the popular masses are doing: publish quality content instead of publishing a large quantity of content. Choose to create content that goes into depth on various subjects to show your business’ expertise and authority. Another tip is to type in keywords you’re thinking of building content around in Google, and see what types of articles/pages are being listed at the top of results. You’ll want to build something similar to what you’re seeing is being featured.
3. Think outside the written content box. Google is starting to display more videos and images in their featured snippets and overviews. If I were you, I wouldn’t solely rely on written content. Rather, I’d also spent time creating videos, images, infographics, case studies, etc. that educate, engage, and entertain your audience.

Hopefully these suggestions help. If there’s one takeaway, it’s that search isn’t going anywhere today. I don’t know if this will be the case in five years, but for now just keep providing high-quality content and you should be fine.