Key Lesson From an Accounts Payable Veteran: "Make a Fuss"
Those who make a fuss are often those who get paid ahead of the rest. And many in credit simply don't "make a fuss" This week we're going to revisit that recent Wall Street Journal article on corporate bullying and stretching of payments by large firms (Big Firms Are Quick to Collect, Slow to Pay).
There were a number of important points and observations made in the article and this week we're going to focus on one more that really caught our eye. In the comments section of the article, a reader wrote:
“I worked [in] accounts payable at a small wholesaler years ago. We would write three batches of checks: (1) the must timely pay (where the owner was paying off debts to family and friends); (2) biggest pay-early discounts; and (3) everyone else. Except for the first group and the deepest discounts of the second, we sat on those already-printed checks until enough money came in and always figured the early pay discount on every one of them, deserved or not. Sure some would fuss, and we would adjust for them, but many did not, so we got lucky.” (our underline)
Now, this probably isn't news to many reading this, since we suspect that if you signed up for this weekly email, you are probably more diligent than the average credit pro. But from everything we've heard over the years, and as validated by this A/P pro, many simply let this kind of slow pay go unchallenged. His comments demonstrate loudly and clearly what is probably the most important thing to remember in credit: the concept of vigilance. It's incredibly simple. But knowing it versus actually executing it - over the long haul - are two different things; which is why it it's something worth emphasizing often in credit. In the crush of your daily workload, it's very easy to forget that, or maybe lose your edge just a little bit. So this week's tip is probably one of the simplest ones you'll ever hear. And it's also one of the most important. If you can simply do the basics and just "make a fuss" when things aren't right, you'll be ahead of probably 80 percent of those who just don't do the follow up. That's certainly a good lesson from a former accounts payable worker. And here's an article with some ideas for coping with unearned discounts: Strategies for Recovering Unearned Discounts (open access)
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