OT: Things that make you go hmmm

Can anyone explain when I get new customers that are looking for terms (net 30ish) and why is it they send me several papers that they are expecting me to fill out.... hmmm so I am to fill out paperwork so I can give them a short term 0% interest loan, I dont get it, then when I tell them that they can find all the information needed for there paper work on out website they get upset... (them) "so does this mean you not going to fill out the papers?" answer (me) "correct I can not spend 1 hr filling out your paperwork then loan you money at 0% interest" then they make the purchase with a credit card.

I have never gone to the bank and asked for a loan and then handed them paperwork to fill out

Most of the other business owners on this site are on the other side of the table but I also dont think that small businesses ask this of their vendors... or do they?

Well that felt good to get off my chest

Some of the paperwork - W-9 for example - is mandated by the IRS and your customers need it so they can report your income to the IRS on a Form 1099.

Some of it is required by the accounts payable people so they can put you into their accounting data base and cut checks.

Some of the paperwork is required because the clerks in the accounting bureaucracy have pigeon holes and they need the proper dead pigeon to stuff into them.

Count your blessings if you are getting 30 day terms. A lot of large corporations are now demanding net 90 or even 120 days. General Electric is the worst offender in that regard - they even demand a discount if they pay in less than 120 days. I told them to put their 120 days where the sun don't shine.

That felt good to get off MY chest!

I use to work for a LARGE Company, and it was **** like this that made me leave that place. We use to have 2 pages of Terms and Conditions that we had to have a customer sign before we could even do work on their site. Of course the Customer would say "I will have to have my boss look at it and sign it". The boss says "I have to kick this up to the Legal Department". So in the mean time no work gets done, my company doesn't get paid and since there is no service work they don't need a Service Tech so I am out of a job.

Big companies seem to think that their ***** doesn't stink and that us "small companies" should be happy that they even called. I work for a lot of Major Companies and basically my rule is the more you spend the more BS I am willing to put up with.

Haven't run into that one yet, but was asked to fill out copious amount's of paperwork after I got the PO and bank transfer down payment for the project. I declined because that was not in MY TERMS they agreed to. I never do a project unless they agree to my terms. Period!

A friend of mine owns a production machine shop. He has been providing machined parts to one of his customers for over 20 years. One day some new manager came into the picture. My friend supplies a lot of different parts to this company, and is the most reasonably priced. This new manager sent him a book of paperwork to fill out with every detail down to the nitty gritty breakdown of the machining cycle. How long this tool runs for, tool change time... You get the picture. At the end of each part he had to breakdown was another worksheet that ended up with a final calculation of his net profit per part, and if it was over 2%, he had to lower the price to match the 2% net profit. You know what he told that guy?

Same company different division tried to pull that with me years earlier, except I was building special machines and tooling, and the allowed profit margin was 5%. Not gonna happen, because it's none of your business, and it never did. You come to me to provide my expertise because you don't have it, then want to dictate how much I make? With that company I always went in at least 20% higher or so just to make the henchmen feel good if they beat me down another 5-10%. It's a game, but got every single job I ever quoted for them, even if it was higher than the competition. My stuff works out of the box, and they know that. I gave up the shop tho. Too many hours for too long, then took a 3 year vacation. That felt good!

It is all about free cash flow.
By pushing the terms out, the company assumes they can better forecast cash flow.
Switching from say, Net30 to Net60 makes that look better to Wall Street in the short term.
The dirty little secret is of course the suppliers who agree to these terms have to absorb the costs somehow, which usually translates to a higher price to the company in the middle term and less flexible customer service.
So the pointless shell game just drives out smaller companies that cannot afford to float loans, etc.
I left a company that had just switched all vendors to Net120, I couldn't use any of the smaller local firms for my business anymore because they refused(understandably) to do business with us anymore.

Tom Jenkins said:

Some of the paperwork - W-9 for example - is mandated by the IRS and your customers need it so they can report your income to the IRS on a Form 1099.

Some of it is required by the accounts payable people so they can put you into their accounting data base and cut checks.

Some of the paperwork is required because the clerks in the accounting bureaucracy have pigeon holes and they need the proper dead pigeon to stuff into them.

Count your blessings if you are getting 30 day terms. A lot of large corporations are now demanding net 90 or even 120 days. General Electric is the worst offender in that regard - they even demand a discount if they pay in less than 120 days. I told them to put their 120 days where the sun don't shine.

That felt good to get off MY chest!

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120 days is a blessing. About 2000 or so, a GM initiated payment scheme filtered into some Tier Level automotive suppliers. If you were doing a piece for a production line and nailed it because you know what you are doing, another company comes in with this 80-20 aluminum junk their piece is made from with a bunch of purchased components mounted to this clap trap. It don't work, and no one gets paid till that POS is working in this line. It never did, and after 7 months of this gub subsidized company trying to make it work, got a call and said build us a REAL one. Pay up, down payment, and I'll take care of it. Worked smooth.

OT, but after listening to that speech of POTUS a little while ago I will never be 'supersized' by anything again!

90 / 120 day terms put my last company (distributor / small controls jobs) out of business. We are not a bank. Before we folded, we were looking for 50% payment up front. You can imagine how well that went over.

Tom Jenkins said:

Count your blessings if you are getting 30 day terms. A lot of large corporations are now demanding net 90 or even 120 days.

Click to expand...

+Net30! It seems like the bigger the company, the longer the wait.

Tom Jenkins
In the late 70s I sent the sheriff to see the plant manager at the Erie GE plant to collect. The buyer hand delivered a check to my shop that afternoon and told me that I would NEVER get another job from GE. I continued to get work from them for another 20 years and they paid on time.

My experience with GE has been that despite the stated net 120 days payment, they still want the maximum discount. With money market interest rates as low as they are these days, they get more bang for their buck that way. Since the discount is pro-rated over the entire 120 day period, the sooner they pay, the larger discount they get. I'm on their online invoicing system and they transfer funds directly to my company checking account. I get an email confirming the transfer within a day or two of my buyer approving the invoice.

I had a customer that was a small shop that was trying to think big. They sent me notice that all their terms was being put on NET 120 days. I immediately replied their account was now PREPAID, all work must be proposed by a RFQ, a quote would be given stating their PO must include prepayment by check, and the work would be scheduled AFTER their check cleared my bank.

I did one more job for them before they folded - and I was the only supplier of theirs that wasn't left with unpaid invoices.

Anyone here work with companies that use third party service companies to pay vendors? I have had 2 of the 3rd party companies tell me I had to pay them( about $200) to get on an approved vendor list. (I Didn't do it)

from jaden ...

Anyone here work with companies that use third party service companies to pay vendors? I have had 2 of the 3rd party companies tell me I had to pay them( about $200) to get on an approved vendor list. (I Didn't do it)

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yep ... one huge company that I had worked for several times before had recently "changed their rules" and could no longer just pay with a credit card (a "P-Card" or "Purchase Card" as they called it) ...

the third party agency sent me a LONG list of hoops to jump through – including the requirement of loading a copy of THEIR "special" software onto MY computer so that I could access their company's "portal" and fill out all of the vendor application paperwork and the invoicing directly into their computer system ...

here's the punch line: they were planning to clip me for 1.65% of my total bill – for an "administration fee" for handling the payment ... (and this was after I did all of their paperwork for them) ...

(I Didn't do it)

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neither did I ...

a couple of years ago I started tracking how much time I was putting into "finance department" type paperwork – basically just trying to "collect" the money that I'd already worked hard to "earn" ... it was well over two and a half days a week – time that I could have put to much better use for my little one-man business ...

so I quit jumping through the paperwork hoops ...

now even the US Government (bless their little hearts) has found a way to pay me with a simple credit card transaction ... basically I just send them a one-page PDF copy of my invoice – and a W-9 form to keep the tax man satisfied ... it works fine once they admit that it actually CAN be done that simply ...

The latest PITA is Conflicts Minerals compliance. The purchasing department from 2 of my customers keep bugging be to fill out this monster. I keep telling them I am not a manufacturer and supply them no raw materials. All I sell them catalog items(or labor), which by the law, I don't need to fill out this paperwork as a reseller. I keep pointing this out to them, and they keep sending me notices that I have to do this.