Gimme mah money!

[FlourPower]

We've got two wholesale accounts. One of them is great: a funky wine bistro that's totally cool with whatever we want to do. Tarts, ice cream, creme brulee, etc. They're happy with everything and pay on time. As a result they get a different and inventive dessert every week.

Then there's the other one. A coffee shop that gets a lot of stuff twice a week. They asked to be billed monthly which was fine. For two months. Long story short we're now billing them weekly and we're still having issues. We haven't been stiffed but they're regularly late. It's been great exposure but we need to get paid. I'm about ready to go to "pay upon pickup."

What policies have worked for some of the other bakers here?

[bripastryguy]

Collection in wholesale is difficult at best. Some accounts pay great and always will, some pay slow, some never pay and move from company to company (I have experienced those)

My company is mainly wholesale and we are beginning to implement the following policies:

-All orders under $100.00 are COD

-All accounts are bill to bill until credit has been established.

-We are installing credit card provosions

-Most all , customers must sign personally for credit with a personal guarantee

I'll let you know if this works, if not I have a big friend that loves my desserts and would gladly use his talents in exchange for some pastry

[chefpeon]

I feel your pain. It so happens, where I work, one of our flakiest accounts also happens to be one of our BIGGEST accounts!

We're tearing our hair out because she never pays on time, but she does end up paying eventually. It's a freakin' battle every month.

It's such a downer.....because here we are, delivering fresh baked goods on demand.....yet,

we have to beg and wait for our money.

Somethin's seriously wrong with this picture.

[FlourPower]

It's pretty much the same with us. I don't know if it's an age thing (they're in their mid 20s) but whenever we ask them about paying their damn bills they fuss and pout and stomp out. With arms full of baked goods, of course. They've never been more than a month late but I can't tell the electric company or one of our suppliers that I'll get them next week, you know?

[fredbram]

And unfortunately, it may not happen with these folks, but it will happen with someone eventually--you'll be left holding the bag when they go out of business.

A lot of times that stomping and huffing is because they don't know how to run a business themselves very well and they don't have enough money and they're scared because they don't know what to do and so they get mad. A natural human reaction.

My approach is to try to reach them at a time when they are not in the middle of picking up, in private--not in public where they might get embarrassed, and appeal to their sympathy. "I know it's difficult running a small business, I go through the same thing, but we are so small ourselves that we just can't afford to have anyone owe us much". Not just you, so they don't feel singled out. What can we do to work this out?

You could also take a much tougher approach, very legitimately, but what the heck, there's always time to step up to the tougher approach if the soft approach doesn't work.

And don't be afraid to expect them to pay on a regular schedule that you have both agreed upon--they aren't doing you any favors by buying from you if they won't pay.

[tryska]

You know what tho?

my electric company will cut the power off if i don't pay them within 45 days of the bill.

I would definitely consider making them pay on pickup until they've got the balance down to zero.

[Carolyn Tillie]

Go C.O.D. Make them pay up front until they have re-earned your trust. Then consider putting them back on account (maybe).

[GordonCooks]

Do the 150% rule - Any new invoice must be paid in full (100%) upon receipt of goods and an additional 50% will be collected at the same time for the old balance.

100.00 invoice = 150.00 payment

[chromedome]

My parents did wholesale for the first couple of years that they owned their bakery in Nova Scotia (eventually they decided it wasn't worth the aggravation).

One of their customers was a real nutbar. He didn't buy a whole lot, he was terribly demanding, and he was always slow to pay. One day when I was there, he came out to the bakery to bitch. My father looked him in the eye (my father is 5' 6", the customer was 6' 4") and said very quietly, "Get out of my f**cking store. When I was in the Navy I worked with any asshole they put alongside of me, but now I run my own business. And I'm not doing business with you anymore. If you set foot in my store again, I'll kick your ass out the door."

The customer left.

My father says that every day of the remaining six years they ran the bakery, he'd think of that moment and smile.

--------------------------------------------------------------------------------------------------------------------

That course of action is not universally applicable, mind you.

[FlourPower]

A lot of times that stomping and huffing is because they don't know how to run a business themselves very well and they don't have enough money and they're scared because they don't know what to do and so they get mad. A natural human reaction.

My approach is to try to reach them at a time when they are not in the middle of picking up, in private--not in public where they might get embarrassed, and appeal to their sympathy. "I know it's difficult running a small business, I go through the same thing, but we are so small ourselves that we just can't afford to have anyone owe us much". Not just you, so they don't feel singled out. What can we do to work this out?

Yeah, we've tried that. They don't want to talk about it. Hell, I can sympathize, so it's not like it would fall on deaf ears.

I don't know if this is all because Mommy and Daddy gave them a shitload of cash and it's not "fun" anymore or if it is a legitimate business issue. But if business is slow they can always decrease their order. They just upped it a month ago.

Their big bill is due tomorrow so we'll see how that goes. I don't want to play the asshole card but I will. Up to and including picketing in front of their damn business. I will get my money.

Edited August 24, 2004 by FlourPower (log)

[irodguy]

While I cannot speak to wholesale baking, I can speak to wholesale supply in general. It is almost a constant rule that very large customers always push the envelope.

Now this of course depends on what you consider large. The basic reason in my business was that the very large customers were very adept money managers. They invested in short term paper their payables. They basically screwed their suppliers for an extra 30 to 45 days and they made money on the interested. They new that their suppliers had to just grin and deal with it.

You generally just have to decide how much risk you are willing to take. In our case the numbers where 50K+. Eventually I got hot and heavy about collecting late fees; this ended our dealings with the company in question. In the long run I am not sure if we were better off because of this or not.

[simdelish]

It is almost a constant rule that very large customers always push the envelope.

Sometimes it's also the very IMPORTANT customers.

There is a very big chef in town... one of the best, and considered by some, THE best in town. He is late for everyone. He has had so many accounts in arrears, it is scary. But know why he gets away with it? Because he is the best. Not only is he a large account (as he has several restaurants, with various partners), but everyone wants to say they provide their stuff to the best guy in town. It's an ego thing as well. No one wants to stomp on the famous chef.

I used to work for this guy 6 yrs ago (he was famous then as well) and I always overheard bad stuff (accounts going unpaid). Nowadays, every once in a while, a vendor wanting to sell us some new incredible olive oil, wine, or cheese will be talking with us about some of the other places he supplies for, and I will ask, "Do you know John Doe?"

Then the guy will sit back, screw his face up a bit, and then very carefully say "He is fantastic chef, and he VERY nice man, but he is no businessman!" When I raise my eyebrows as if to say, Why? --- the reply comes "He no pay his bills!!!"

This guy is an incredible chef, and very personable. His food is out of this world. I go to his flagship restaurant about 3 or 4 times a year. I keep saying to myself it might be my last.

Last week the paper announced he was filing Ch 11 bankruptcy. He is trying to reorganize, but the bottom line, many of those accounts will go unpaid, as Uncle Sam will get his money first.

[chocophile]

Although my business is not wholesale and there have been times when I have been late in paying accounts due to collections challenges and other cash flow issues at my end, I have found humor to be one of the great ways to get bills paid, especially with smaller companies. I have not found humor to work for large companies.

A true example of late collection (120 days) just recently finally got some results (50% payment which basically covered my out of pocket expenses, not my time) included the following. Up until I sent this fax I was getting no response from faxes and phone calls.

Dear Customer:

Congratulations! You are only the second client of mine in nearly 20 years not to pay one of my bills. The only other one was {an infamous Wall Street junk bond magnate who went to jail}.

{... more ...}

Well, I got a call from them the afternoon I sent the fax and payment was sent within 48 hours. Their excuse? Their client did not pay them. (They are now suing their client, an Italian furniture manufacturer, so I might get the rest, but who knows if/when.)

The part about being stiffed only once in nearly 20 years is true, I guess I am lucky. Any guesses about who the junk bond magnate was?

Policy from now in is a deposit of 100% of the estimated out-of-pocket costs with balance due upon delivery/completion unless/until credit has been established.