Why Are We Financing Fortune 500 Companies?
And here’s another problem of the economic meltdown — companies are stretching out their payables like mad. Our average payable has increased 50% in the last 120 days. That translates into millions of dollars of cash shortfall versus our plan. We believe it’s all still collectible, but we just can’t seem to speed up payment. We are going to launch some new and more meaningful efforts to collect, but it just shouldn’t be that hard. And you hate to be heavy handed with customers in this environment.
Is it a good idea to threaten to suspend service? When do you cut someone off? Is it appropriate for the CEO to make a collections call? All these questions now come into play. We never had to think about them before.
What’s particularly irritating is that, with very few exceptions, every company on our account roster is larger than we are, with bigger balance sheets. So we find ourselves in a position where WE are financing big companies. It is absolutely maddening.