Uh, Walmart has been doing this for years: the smaller the supplier the slower they pay.

Corporate theft, and they wonder why people are protesting in the streets.

We got bought out by a multinational German firm a few years back. All of our bills were taken care of by our plant until then and they took over at corporate, It got to the point where if we wanted anything to do our job with, our boss had to take his personal credit card and get it to keep things going. I'm not talking about a company with a hundred employees, I'm talking about a company who has over 200K employees. It was fuking rediculous.

doglover: Bigdogdaddy: We got bought out by a multinational German firm a few years back. All of our bills were taken care of by our plant until then and they took over at corporate, It got to the point where if we wanted anything to do our job with, our boss had to take his personal credit card and get it to keep things going. I'm not talking about a company with a hundred employees, I'm talking about a company who has over 200K employees. It was fuking rediculous.


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Good rule of life: Nothing worth talking about can be talked about in business-speak.

If you're not gonna tell us anything at all about your company, don't. I'm aware you can't name names, but at least lie and say something like "I work for a manufacturing company." when you really work at Kraft Foods or Cocacola Inc."

I work for a manufacturing plant that makes OEM and aftermarket parts for automotive as well as industrial machinery. Not sure what difference that makes, but there you go.

Bigdogdaddy: We got bought out by a multinational German firm a few years back. All of our bills were taken care of by our plant until then and they took over at corporate, It got to the point where if we wanted anything to do our job with, our boss had to take his personal credit card and get it to keep things going. I'm not talking about a company with a hundred employees, I'm talking about a company who has over 200K employees. It was fuking rediculous.

You work at A-B.

jso2897: I used to work in Accounts Payable at a large corporation - a public utility that no longer exists - purchased by Verizon.
This was common practice even back in the eighties and nineties - we routinely bankrupted and ruined small businesses by simply not paying them until we f**king well got around to it. Which was sometimes never.
We didn't pay the big businesses either, but they overcharged so much they didn't care. Our purchasing agents lived well.
Most companies stand for it because they want the sales, and big companies simply replace suppliers who undertake collections against them.
It's legalised theft, and it's billions every year, and it ruins lives.
But, what are you going to do?

I'm hoping we get to "summary executions" and "seizing assets" soon.

jso2897: I used to work in Accounts Payable at a large corporation - a public utility that no longer exists - purchased by Verizon.
This was common practice even back in the eighties and nineties - we routinely bankrupted and ruined small businesses by simply not paying them until we f**king well got around to it. Which was sometimes never.
We didn't pay the big businesses either, but they overcharged so much they didn't care. Our purchasing agents lived well.
Most companies stand for it because they want the sales, and big companies simply replace suppliers who undertake collections against them.
It's legalised theft, and it's billions every year, and it ruins lives.
But, what are you going to do?

Pick up a torch and burn the motherfarker down?

ZAZ: If you're a snow plow contractor for the state of Massachusetts you get paid on time for the first storm. You get the rest of the winter's pay in the summer when the legislature passes a supplemental budget. The regular budget only has money for one storm.

Yet, the Occupy group will not dare protest the Massachusetts government.

doglover: Imagine a bowl of plain white rice. That's the calories. They'll keep you alive. That's the story's main points.

The details are like spice. That's why Stephen King is a millionaire and much better plot writers are less famous. They aren't as good at adding details.

Your grasp of literary theory is stunning.

Meh. Common practice with pretty much any company that feels that they're bigger than you.

I tend to not do business with them again, regardless of requests unless they have cash in hand for the next job (I've walked off a few because they claimed that they would, but failed to show it when I was about to start). I ONLY take that route when the company has tried to stiff me in the past.

Sending a colorfully worded letter from a legal representative outlining the additional fees for late payment (as per the contract) and the consequences of continued non-payment are usually what gets me paid in situations like that. Then again, I usually send them to the home address of an exec (they don't like that).

Dick move for sure, but you're screwing with my money, and I view that as an act of war.

Not surprisingly, clients who have problems paying are also the most difficult to work with (prior to them trying to stiff me on the bill).

Well gooooooool-lly. I guess the Free Market (tm) doesn't work after all.

Just imagine what it would be like for small businesses under a Libertarian society!

AcneVulgaris: jso2897: I used to work in Accounts Payable at a large corporation - a public utility that no longer exists - purchased by Verizon.
This was common practice even back in the eighties and nineties - we routinely bankrupted and ruined small businesses by simply not paying them until we f**king well got around to it. Which was sometimes never.
We didn't pay the big businesses either, but they overcharged so much they didn't care. Our purchasing agents lived well.
Most companies stand for it because they want the sales, and big companies simply replace suppliers who undertake collections against them.
It's legalised theft, and it's billions every year, and it ruins lives.
But, what are you going to do?

Pick up a torch and burn the motherfarker down?

Start chargin' late fees? (which will also never be paid)

Dwight_Yeast: Uh, Walmart has been doing this for years: the smaller the supplier the slower they pay.

Gotta love some Walmart hate. Common practice seems to be to engage a supplier that can meet the needs of Walmart, and then place a standing order for X amount of units per year. They pay asking price for a year or two and then demand the product for pennies on the dollar. The supplier, who has altered his business to accommodate the volume of Walmart, has two choices: sell his product at a great loss, or find storage for said units and sit on them forever. At least that's how they handle their nursery suppliers. Many nurseries in the Midwest have now learned the hard way, as Walmart burns one and moves to the next.

Nemo's Brother: ZAZ: If you're a snow plow contractor for the state of Massachusetts you get paid on time for the first storm. You get the rest of the winter's pay in the summer when the legislature passes a supplemental budget. The regular budget only has money for one storm.

Yet, the Occupy group will not dare protest the Massachusetts government.

The government and the unions are another version of the 1%.

DrippinBalls: Companies (the LARGE ones) are effectually evil, worthless, and should be pilfered by their employees as often as possible. Many years ago, I ran the A/R and collections department for a small-mid size company that was going through a change of ownership. In this process, they decide to withhold payroll to all but the senior execs. Bad move. I withheld all A/R receivables until I was not only paid, but my commissions were paid. With the small businesses I have now, I am now paid immediately, if not when the job starts or they get zilch. It's sad that being a crook and a liar is rapidly becoming the new standard for America.

THIS is how you tell a story, Bigdogdaddy. It even has some one-comeuppance!

DisregardTheFollowing: Dwight_Yeast: Uh, Walmart has been doing this for years: the smaller the supplier the slower they pay.

Gotta love some Walmart hate. Common practice seems to be to engage a supplier that can meet the needs of Walmart, and then place a standing order for X amount of units per year. They pay asking price for a year or two and then demand the product for pennies on the dollar. The supplier, who has altered his business to accommodate the volume of Walmart, has two choices: sell his product at a great loss, or find storage for said units and sit on them forever. At least that's how they handle their nursery suppliers. Many nurseries in the Midwest have now learned the hard way, as Walmart burns one and moves to the next.

That's how they handle all their suppliers. WalMart has been hell on the manufacturing industry. It's a big reason why they like China so much. In China they can abuse the workers to hit quotas and fudge the numbers to make it look profitable.

TheShavingofOccam123: If you ever expect corporate America to "do the right thing", you have to understand, in their minds, this is doing the right thing.

It's more profitable. In corporate America, nothing else matters.

My company does business with lots of small customers and several large international firms (in chip making technology and two automobile manufacturers), and can vouch for the truth that the bigger the client firm the slower they pay.

After being burned several times by small customers when I first started the company we now make them pay in full before the product ships. A few have grumbled, but I just point out that you can't go to the grocery store and walk out with a cart full of food with a promise to pay after payday. Cash on the barrelhead.

One of the car companies (starts with an 'H') tried to slow-roll me on their first order, claiming that accounting never received delivery confirmation. It took nearly 3 months to get paid on a 30-day net (per the contract) production order. I only got paid then because they called to order another batch of parts. I toll their purchasing agent that I still hadn't been paid for the first batch, and that not only would I not make them a second batch until I was paid for the first, but that I owned the rights to the design and tooling (part of why I got the business in the first place), and that if they wanted to go with someone else they'd have to start from scratch.

I got a few blustery phone calls, but I also got paid, and have been paid promptly ever since. I think they literally keep score of how suppliers react and act accordingly thereafter. You beg for mercy and they'll walk all over you. Hold them accountable from the outset and they also act accordingly.

File a lawsuit, get a judgement, and use that judgement to file a bank garnishment. I did that when my former employer tried to stiff me my final paycheck, vacation pay, and payment for some equipment I sold them.

Didnt hurt that I knew what accounts would most likely have money.

I have my own business. I made it a policy for customers to pay up front for goods I would have to order for them. I got tired of being stiffed for items I couldn't return. When I get a customer who biatches about having to pay for something up front, I look at them and ask, "When you go to the store, do they let you take the item and pay later for it?" That usually shuts them up.

I just had a potential customer call me last week asking me to secure some computer equipment for her business. She wanted me to order about $5000 worth of equipment for her without so much as a dime up front from her. She complained that it was a lot of money to pay up front. I flat out told her if she can't afford paying $5000 up front she isn't going to be able to afford paying $5000 later. Told her to have a nice day and to call me back when she had the money. I doubt I will hear from her again, but with customers like that, I'm probably better off. I did some asking around a few days after that call, apparently they are notorious for not paying invoices.

I've heard this called "supplier-side financing", which has to be one of the more offensive examples of business speak.

Over the years, our company has divided our clients into three groups: the A list, the B list, and the Fecal Roster. Being slow to pay is the express lane to the FR. It's also a one-way trip.

lennavan: TheShavingofOccam123: If you ever expect corporate America to "do the right thing", you have to understand, in their minds, this is doing the right thing.

It's more profitable. In corporate America, nothing else matters.

In Corporate America, YOU pay COMPANY!

What a country! :D

StoneColdAtheist: After being burned several times by small customers when I first started the company we now make them pay in full before the product ships. A few have grumbled, but I just point out that you can't go to the grocery store and walk out with a cart full of food with a promise to pay after payday. Cash on the barrelhead.

phoxxy: I have my own business. I made it a policy for customers to pay up front for goods I would have to order for them. I got tired of being stiffed for items I couldn't return. When I get a customer who biatches about having to pay for something up front, I look at them and ask, "When you go to the store, do they let you take the item and pay later for it?" That usually shuts them up.

Hey, hey...great minds and all that! :)

I make them post 50% to place an order, with the balance and shipping due before the product ships. Once a customer has paid a 50% deposit I've literally NEVER had one back out. A few have taken a while to pay the balance on the order, but once they realize that nothing ships until it's paid for they come up with the money.

I've had a few actual and potential customers comment that I'm awfully small to take such a hard line, to which I've replied that they should call Amazon or Northern Tool or Home Depot, place an order, and see if it ships without payment. After all, those are much bigger companies and surely they will have a more accommodating attitude. After they grumble a bit I remind them that I'm a small business that has to pay cash for everything and meet payroll every week without fail, or I'm out of business. I simply can't place at risk my business and employees for customers who may not pay.

Like you, I'd MUCH rather pass on an order where the customer baulks than spend thousands up front for something I may get stuck with. I don't have the time or energy to chase deadbeats, and am not big enough to have a collection agency on retainer, so cash is king.

You basically don't want to do business with Wal Mart or McDonalds. If they have something they really want they can pay your asking price and up front or forget it.

I've worked for a number of consulting companies in the north-west. There are several businesses in our area owned by the local uber-billionaire entrepreneur/business tycoon. None of the firms I worked for would do work for any firm owned by this guy as the word was they would screw you over in a heartbeat and find any excuse to not pay.

Fearlessly thinking that could never happen to us, we decided to take on a short 3-month project with one of these companies. 3 weeks in they must have felt they had enough information from us to try to finish off the work on their own. They booted our consultant out and refused to pay.

Protip... clients with bad reputations earned them for a reason.

I will never understand how businesses go to the system we use today. Purchase orders just seem insane! I don't deal with that stuff, but I sit one cube over from the folks who do. I'm always surprised when I hear them on the phone with a customer that is PISSED we won't ship them any more product simply because they haven't paid us in ages. I'm grateful that we're in a position to do that (there really is no other vendor for the stuff we make).

Magorn: Dwight_Yeast: Uh, Walmart has been doing this for years: the smaller the supplier the slower they pay.

IF they pay at all. I handled a business liquidation of a T-shirt printer who was doing relatively well until they got an order from Wal-mart. Wal-mart supplied all the designs and asked for such huge quantities that it was necessary to run the plant flat out, 3-shifts a day, and turn away all their other customers just to fill it.

Well, fill it they did, but there was just one little problem: Seems the designs Wal-mart supplied them for these "graffiti" t-shirts, hadn't been carefully screened by corporate, and many of them (apparently copied from real wall tags without understanding what they meant) contained racist slogans and drug references (including a prominent 88 on one and 420 on another).

The resulting PR about that caused Wal-Mart to pull the shirts from the shelves and tell the printer "sorry, we won't accept delivery of any more or pay you for the ones you delivered" When the printer pointed out that a) that would bankrupt him and b) Wal-mart was contractually obligated to accept the entire inventory and pay him for them all.

Wal-mart's response was simply "Go ahead an sue us - if you think you can afford it- you might get a little something ten years from now"

Wal-mart is horrible about that. On a smaller scale, look at their deli areas in the super store. Don't ever buy any pre-made sandwiches, etc. For instance, a baker makes sells loaves of bread through Wal-mart, but the baker only makes money if the loaf sells per Wal-mart's ridiculous contracts. So deli take's the bakers bread, makes sandwiches with it and then tells the baker too bad so sad, your loaf didn't sell, and we don't owe you any money.

Also, Wal-mart likes certain products packages a certain way. They will make deals with manufacturers to package their product way so it can only be sold in Wal-mart. And the thing that is so ridiculous about this is that the package, from all appearances to the consumer, looks just like any other package of the same brand sold in other stores. But unbeknownst to you or I, there is a slight variation in the package that almost no one would be able to detect. This can be the way the package is put together down to something as mundane as how a bird seed bag is stitched together. And if the manufacturer goofs the packaging, then Wal-mart will refuse the product. The manufacturer sells the same product in other stores so they should still be able to make a profit off the item by finding another retailer to offload it to, right? Nope. Wal-mart contracts forbids manufacturers from selling any product that is packaged per Wal-mart's specifications. I mentioned the bird seed for a reason. There's a local bird seed plant that makes and sells a certain bird seed product that is sold in most stores. Per their contract Wal-mart varied the package by counting how many stitches the seams of the ends of the bag. Due to an error during packaging, the bags stitching was off and Wal-mart refused the product stiffing the company for hundreds of thousands of dollars. And due to the mature of this specialty product, they couldn't just repackage it or try to sell it as is to another retailer. Otherwise, that is a breach of contract and Wal-mart can sue.

I try not to shop Wal-mart, if I can, just for this reason.

Don't Troll Me Bro!: Why not, the Republicans have long given up any illusion that they are for the mom-and-pop businesses. Why should the mega-corps waste their time and money keeping up the facade?

How can you say that? All I've read about this week is how republicans are bravely defending the millions of small business owners who take home over $1 million in personal income per year from a job-killing tax increase that the demorats want to waste on extending job-killing payroll tax cuts for the greedy poor and middle class.

I love when one scumbag businessman screws another scumbag businessman. I saw it happen right in town when a well known dirtbag hardware store owner was shut down when home depot moved in.

Laughed myself silly. Play with fire you gonna get burned

casual disregard: I feel like your experience should be something taught to all people at the high school level. Senior Finance: how not to screw yourself with credit card debt, how to pay your bills, and how to avoid corporate vampires should you enter the business world for yourself.

Thanks for the kind words, but as I am confident you see from the other comments, this is something every successful small business owner learns...and quickly, or they go out of business. In truth, many learn it too late and go out of business anyway; then pick up the pieces and are smarter the next time around.

But yes, basic personal- and micro-economics is something we should be teaching every kid in high school. Instead, we seem determined to prepare them for a service-sector "McJob" with a megacorp. One hidden benefit to the Great Recession is that about twice as many sole proprietor and small partnerships have been starting up a year since 2008 as in prior years as people give up on working for others. That will pay great dividends in the coming years.

Magorn: Dwight_Yeast: Uh, Walmart has been doing this for years: the smaller the supplier the slower they pay.

IF they pay at all. I handled a business liquidation of a T-shirt printer who was doing relatively well until they got an order from Wal-mart. Wal-mart supplied all the designs and asked for such huge quantities that it was necessary to run the plant flat out, 3-shifts a day, and turn away all their other customers just to fill it.

Well, fill it they did, but there was just one little problem: Seems the designs Wal-mart supplied them for these "graffiti" t-shirts, hadn't been carefully screened by corporate, and many of them (apparently copied from real wall tags without understanding what they meant) contained racist slogans and drug references (including a prominent 88 on one and 420 on another).

The resulting PR about that caused Wal-Mart to pull the shirts from the shelves and tell the printer "sorry, we won't accept delivery of any more or pay you for the ones you delivered" When the printer pointed out that a) that would bankrupt him and b) Wal-mart was contractually obligated to accept the entire inventory and pay him for them all.

Wal-mart's response was simply "Go ahead an sue us - if you think you can afford it- you might get a little something ten years from now"

General Electric runs the same. When my last company did a job for them, the first question any vendor asked me was "So, has GE paid you at all?" Every business in upstate New York had GE, at the time the 6th biggest company in the US, on a cash up front basis.

Our company calls it "zero cash days". We buy parts and chemicals, make our product, and sell it. We get paid, and then sit on the money for a few months before paying our suppliers. If we feel like it.

Totally evil to the suppliers, which don't get paid for 90 days or more, but a friend in Accounting says holding on to the money until the next financial quarter really makes our profit margins look bigger.

Resonant: Our company calls it "zero cash days". We buy parts and chemicals, make our product, and sell it. We get paid, and then sit on the money for a few months before paying our suppliers. If we feel like it.

Totally evil to the suppliers, which don't get paid for 90 days or more, but a friend in Accounting says holding on to the money until the next financial quarter really makes our profit margins look bigger.

Always nice to see that some companies are looking at the long-term picture....

Gosh, we used to get 2 10 net 30, and now we're COD, how did that happen?

Gough: Resonant: Our company calls it "zero cash days". We buy parts and chemicals, make our product, and sell it. We get paid, and then sit on the money for a few months before paying our suppliers. If we feel like it.

Totally evil to the suppliers, which don't get paid for 90 days or more, but a friend in Accounting says holding on to the money until the next financial quarter really makes our profit margins look bigger.

Always nice to see that some companies are looking at the long-term picture....

Gosh, we used to get 2 10 net 30, and now we're COD, how did that happen?

Yeah...LOL.

Even though I agree that delaying payment is evil, I understand why big companies do it. If a company is doing millions or billions in business every year, the interest earned on cash in the bank is substantial. Hold back payment for 30-60-90 days and you can pad the bottom line considerably from the interest earned on the cash. Small businesses don't earn as much (if anything) on their deposits, so would rather plow that money back into the business where it can contribute to future growth, rather than have it sitting around doing nothing.

StoneColdAtheist: Gough: Resonant: Our company calls it "zero cash days". We buy parts and chemicals, make our product, and sell it. We get paid, and then sit on the money for a few months before paying our suppliers. If we feel like it.

Totally evil to the suppliers, which don't get paid for 90 days or more, but a friend in Accounting says holding on to the money until the next financial quarter really makes our profit margins look bigger.

Always nice to see that some companies are looking at the long-term picture....

Gosh, we used to get 2 10 net 30, and now we're COD, how did that happen?

Yeah...LOL.

Even though I agree that delaying payment is evil, I understand why big companies do it. If a company is doing millions or billions in business every year, the interest earned on cash in the bank is substantial. Hold back payment for 30-60-90 days and you can pad the bottom line considerably from the interest earned on the cash. Small businesses don't earn as much (if anything) on their deposits, so would rather plow that money back into the business where it can contribute to future growth, rather than have it sitting around doing nothing.

STA, you're right that it makes total sense from the financial standpoint, especially in today's market, but it still seems like a dick move. I know that, in our early days, we'd bend over backwards to get a contract with a big player, only to find out later that we'd had it all wrong. Turns out we were bending over forwards....

A painful lesson, but it taught us to add some more terms to the contracts.