The company I work for is a fourth quarter company. This means that, while it’s solvent the entire year, the time between Thanksgiving and Christmas is when it makes any significant profit. We’re ruled by Black Friday and Cyber Monday, just as any other retail endeavor is.
This year has been the craziest yet. For instance, many vendors will not accept a 30-day invoice policy; they want their money before they ship their product. In light of the current economy I understand this; at the same time, it penalizes companies like ours that prides itself on paying every invoice in 30 days and have a track record to back this up. What do we do? We pull out the plastic.
We were on the Today show two days ago, a wonderful advertising venue. The phones and the Internet went wild, to the point we sold double our sales goal. It was great. At the same time, we had to order more product which brings me to the paragraph above. And, yes, we got out the plastic again.
It’s interesting that vendors think plastic is more reliable than a history of paying on time. They also pay for the privilege of being able to charge, since credit card processors take their cut and the vendor receives less than it would under a 30-day billing system.
It’s just the way of the world right now. And, I predict it will pass. But will we return to 30-day invoicing? I don’t think so. I think the wave of the future is the wire transfer. I say this because today I received an email from a vendor who no longer accepts 30-day invoicing or credit cards as payment, due to fraud issues in the industry.
In a way, I’m glad. In another way, I’m reminded that the only constant is change; and, as the company’s finance manager, I’d better be prepared for a lot more wire transfers in the coming months.
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