Floor Plan Financing Accounting

You need simple solutions to run your business and floor plan financing could streamline your inventory acquisition and reduce some of your administrative costs.

Floor plan financing accounting. Dealers can then use their floor plan line of credit to purchase inventory from auctions and other inventory sources. Reduces the manufacturer s costs when a piece of merchandise from a manufacturer is received by the dealer who has a floor planning arrangement with a lender the lender notes the item and immediately sends the manufacturer a check for it. This article reviews how you can manage floor plan financing with quickbooks. Retailers use a short term loan to purchase inventory items and the loan is repaid as inventory is sold.

A floor plan is a method that a business such as an auto dealership can use to finance inventory that they are holding for resale without having to tie up their own capital in that inventory. Retail floor planning also referred to as floorplanning or inventory financing is a type of short term loan used by retailers to purchase high cost inventory such as automobiles. Floor planning is a type of inventory financing for large ticket retail items. The arrangement is most commonly used when large assets such as automobiles or household appliances are involved.

Much like a credit card a floor plan financing company extends a line of credit to a car dealer.