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Many years ago, there was a regional retail chain customer in the Mid-Atlantic States. For this story, let's call them the John Doe Widget Company. They were always difficult to deal with: chronically late with payments, constantly needing several collection calls per invoice and they always took deductions on anything and everything. In fact, the company's name became a verb in our office lexicon, as in "We've been John Doe'd again!" This company set the standard now used by today's big-box stores that use accounts payable as a profit center with those same tactics. John Doe was the master of evasion and deductions!
Over several years, the John Doe Widget Company expanded by buying not one, but two, smaller chains that were in bankruptcy. With its expansion, they became even more difficult to deal with; payments got even slower, requests for deductions increased, constant calls were required for collections. More chasing. More frustration. Why were we surprised? We talked to supervisors, managers, the controller, the finance director, the chief financial officer--you name it, we talked to it to get paid.
After months of intense run-around, enough was enough. I was done playing their games and took a tough stance. The John Doe Widget Company account was flagged against any new business. That got their attention. Once the account was current, we shipped existing confirmed orders, but did not take any new ones. And the cycle would start again: slow payments, unreasonable requests for deductions, and again a flag was placed on their account. One day, they called, desperate to receive one of their confirmed orders. After getting a commitment from John Doe's finance director that they would overnight payment for their outstanding invoices in exchange for letting two more truckloads of products ship, I approved the new purchases.
As one can guess, the overnight did not arrive. One truck had already delivered; the other was in transit and I ...
Source: HighBeam Research, Reclamation demand cures the John Doe'd blues.(Credit Words:...