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Posts Tagged ‘Working Capital’

Do You Stay On The Gas With “Unlimited” Resources…?

March 20th, 2017 Comments off

     It’s been just over four months since I made the jump to start a self-imposed sabbatical to “recharge” and look to define the next chapter after 4.5 years in a hyper growth start-up. In essence, it was 4.5 years training at a redline pace that ultimately demanded a level of moderation, but at a pace that wasn’t mine to control. But what does a hyper-driven and intensely competitive individual do to “recharge” the batteries and spend some much deserved down time do? Well of course you decide to set your sights on doing one of the longest paved climbs in the world, as well as deciding on racing two of the most notable Classic races in Europe that will have no less than a combined 100 kilometers of cobbles between the two events. Those are natural next steps in getting some rest…right?

I’ve always made some pretty strong comparisons between the training for my cycling and the disciplines that have to be practiced in a Corporate environment. While some may balk at the comparison, it comes down to managing the resources you have available, using those resources in an effective manner, while accomplishing the goals or commitments you’ve made to yourself…or others. Let’s look at the very macro comparison of the resources available at a Corporate level versus Personal level. At the Corporate level, imagine having complete open access to the checking account of your favorite VC and being able to deploy those resources in any way you could to your business…ANY way. You can spend anything from $1 million…to $100 million…or more if you felt you needed it. Let’s say you settled on the amount and burned through that spend. What have you been able to accomplish with the deployment of those resources in the end? Have you built a healthy business that has a strong foundation for future growth and have you been able to establish a strong pattern of increasing performance metrics that strike the right balance between aggressive growth, establishing a healthy corporate environment, while positioning the company to deliver on your commitments? General questions, but you get the point.

Let’s talk about the Personal side though. I find myself on sabbatical and all of the sudden I basically have an “open checking account” for training time and can do whatever I want. I can train for 10 hours per week, 20 hours per week…or even 40. However, as with a Corporate environment, there is the same consideration to resources and a healthy foundation as there is for an athlete training for an event. It has to be methodical, planned, sustainable, with appropriate periods of reflection and a tempering of the pace. The attached picture is the actual chart of my training since November and the progressive peaks and subsequent tapering as I move towards my goal of leaving for Europe next week. In the chart the magenta line is the shorter term acute training load while the blue line is the longer term chronic load, which indicates a core fitness base. The yellow line is the fatigue line and the more it dips, the higher the fatigue and time and indication of need to rest. Think of the magenta line as the 200-day moving average for a stock…you can see spikes above the norm, but ultimately it’s going to come back down before hopefully making the next run up. It’s the same concept here. You can see where I’ve had the spikes, but ultimately, you taper down before making the next training push. It’s about finding the right balance, creating a healthy foundation, and continually pushing forward.

Just like the Personal level, there is an equal penalty for “overtraining” at the Corporate level. At the personal level, overtraining can lead to becoming ill, an inability to achieve peak performance, and an extended recovery time to get back to a healthy state of training. In the Corporate environment, the equivalent of “overtraining” is essentially excessive spend, excessive hiring, and a deterioration in the performance metrics of the company. At that point, there’s no choice but to move into a period of recovery to get back to a higher level of performance.

Over the last four month I’ve managed to put in over 9,200 kilometers in the saddle, climb in excess of 300,000 feet, and during that time burn almost 210,000 calories on the bike to achieve that. Again…that’s just in the last four months. Putting 210,000 calories in perspective with some of my favorite foods…

  • Roughly 2,100 packets of energy gel…
  • 131 pounds of pasta…
  • Roughly 1,750 Chobani yogurt cups
  • 1,500 cans of that nectar of the gods…Coca Cola

You get the idea…it’s all about the long game and establishing a strategic and achievable result. Imaging trying to cram all the stats above into a shorter window…say even two months. The likelihood is that you don’t have the proper foundation in place, will overtrain yourself, you’ll likely get sick…and ultimately your fall back weeks or a month…or in the case of a Corporate scenario…potentially losing Quarters due to overtraining.

Happy training my friends…

Jeff

Employees, Facilities, & Systems In A Hyper Growth Environment…

January 19th, 2017 Comments off

IMG_0219     I’m really enjoying the conversations that I’m having with prospective new teams, as well as the vendors that I partnered with during the hyper growth phases at Cylance. The most predominant question is “how did you guys plan that out and accommodate the growth you did?”. Really, the level of success we achieved was not planned, at least not in the timeline that it was achieved in. From the outset, we had “modest” growth that still had us doubling our billings on an annual basis. We knew early on that we were going to have a relatively aggressive trajectory, but certainly not the hyper growth we were confronted with. While it has its blessings, it also tables an entirely unique set of challenges. Challenges on finding that appropriate balance in planning out employee growth, facility growth, as well as the systems you want to put in place…all with a focus on prudent spend knowing that the wrong decisions will result in unnecessary cash burn.
Employees. While we were extremely surgical in the original hiring, there were also unplanned surprises that increased our headcount, and thus our burn. Take for example the assumptions about our product and what we were anticipating relative to the ongoing support of our customers. Early on, the assumption was that our product would be entirely turnkey, that any deployments would be extremely rapid, and that the product would be easily integrated into any customers native environment. Well…not so fast. We quickly determined that we would indeed need a more robust customer support team, and one that was going to be more than just a few people. It was not a difficult decision to make as we knew this was the best decision for the customer and the best decision in support of our product and future success. We just needed to ensure that we moderated our spend in other others to accommodate the unplanned spend. As with some of our other spend, these were not black & white spreadsheet decisions and we worked through all the shades of grey as a team. Also early on we were aggressive in the buildout of our Sales Engineering team. This team was the technical complement to our Sales team and would be responsible for any pre-sale technical questions, proof of concepts, deployment issues, etc. As we started to close more business it was determined we needed a dedicated team just to handle the proof of concepts with prospective customers. Again, not in the plan, additional headcount, and thus, an increase in our cash burn. More conversation that thad to be addressed by the broader team and ensure that the metrics that we were operating under continued increasing in the face of rapid employee growth.
Facilities. When you start out in a living room on fold up tables you tend to maintain that same prudence planning and moving into new locations. We had early support for an investor with some temporary space. Following that, it was then a big commitment for us to assume a five year lease on a 12k square foot space when we still had barely secured our first Services customer. Even more surprising was outgrowing that space in less than two years. The other three years? We had always negotiated great leases so we had no problems maintaining cash flow neutrality when we subleased that space and moved into a new 16k square foot space, but with the opportunity to expand to additional floors within the same building. Imagine our surprise when we realized that in less than a year we were going to be out of space due to a dramatic increase in bookings after we signed the lease. We then renewed our relationship with The Irvine Company to lease additional space in an adjacent building and could easily expand to additional floors. As with our earlier leases, we always ensured we had negotiated leases that we could sublease if necessary if there were any unplanned corrections to the business that had us with excess capacity. However, it wasn’t excess capacity that was the issue, but a lack of. As I had successfully worked with other companies in a campus type environment, we started leasing vacant space in adjoining buildings to accommodate the rapid growth. There was little cap ex for buildout and we had exceptional flexibility. Even as we started to occupy a significant amount of space in prominent high rise buildings adjacent to the airport, while also securing prominent building top signage, we were able to keep our facility expense to less than two percent of our total operating expenses. Building top signage on two buildings that would essentially create the Cylance corridor near the airport.
Systems. As I was handed a laptop with Quickbooks on my first day i knew that this would not be our platform moving forward and quickly looked at what we might deploy that would carry us out over the next 2-3 years…or more. It was determined that Netsuite would be the platform and we could add additional modules as we grew and our needs changed. Whether commissions, deferred revenue, fixed assets, or multi-currency, Netsuite provided an economical platform that was widely adopted and could scale. I had just completed an SAP implementation and it was clear that we didn’t need to go in the direction of Oracle or SAP, both from a complexity, as well as a cost perspective. There were also some other great platforms that we had looked at early on. As an example, we had looked at Domo as a candidate for our dashboard platform. However, at a full implementation cost approaching six figures it just didn’t make sense early on as we had very little to report on in a pre-revenue capacity. A great platform, but not for the nominal amount of financial data we were compiling. Fast forward to a year of accumulated product bookings, pipeline data, channel data, etc. and we were properly positioned to take advantage of it, which we did. As we also started to push towards employee growth of almost 500 we knew that the HR & Payroll module in Netsuite was not going to be robust enough for what we needed and determined that Workday would be the appropriate platform as the company started scaling towards a headcount in the thousands. A year prior and headcount of barely 120 there was certainly no reason to spend high six figures to license and implement Workday. However, a year later and employee count approaching 500 it became a much easier discussion to have.
So how do you plan for employees, facilities, and systems in a hyper growth trajectory? You really don’t. There is no Board meeting that your going to roll into and legitimately say your going to go from $10M to $100M in the next year…not unless you’re going to sedate them and move quickly through that slide. However, you do put the systems and decisions in place that will give you the most flexibility to continue altering your course without having to look back with the realization that you’ve incurred a significant amount of sunk costs that really didn’t deliver any value or provide you with future flexibility. Decisions have to be made in tandem with the broader team, the key vendors that you’ve established relationships with, as well as the input of the Board and key advisors. It’s a heck of a ride and one your not going to be discussing in B-schoool…although look for a Cylance case study in the future!
Thanks for reading…
Jeffrey Ishmael

Are You Striving For Improvement or Optimization?

July 16th, 2012 Comments off

     As my prior colleagues can attest, my pursuit of improved financial performance has never been focused on our results versus a prior year, or even a competitor, but in striving for the optimal position for our business relative to our goals. While I will always report our position relative to a Budget and the promises made to key stakeholders, we know Budgets are a static view in the midst of market dynamics that are constantly changing. Improvement in an of itself can very often be characterized as mediocrity, while a sincere drive for optimization implies a focused drive on pursuing the highest caliber of result. You might say that’s a rather general statement so let’s put this in a more specific context.

     Let’s take one of the more significant categories relative to working capital management…Inventory. Let’s make the assumption that a company is growing at 15% and has determined that there is a goal to keep inventory growth to no more than 5%. In this situation, you’re essentially going to realize a higher velocity on that inventory, thus a lower amount of inventory days on hand, and theoretically, a more “optimal” position. Right? Not necessarily. You reach the end of the year, pat yourself on the back for achieving the revenue growth and keeping inventory growth to only 4%. Hitting your goals doesn’t imply that you’ve achieved an optimal position. It could easily be the contrary.

     Have you taken the time to run a more detailed analysis of your revenue stream, what those trends are in the most recent 4-8 Quarters, and how that compares to the anticipated growth in the coming year? Have you taken the time to run a more detailed analysis of your on-hand inventory relative to the revenue statistics to ensure that you have an appropriate pairing between the two? What’s even more challenging is to add the complexity of multiple seasons, product categories, demographics, or even regional elements, and you have a very challenging situation to manage.

     This is the analysis that is so critical when it comes to not only the management of working capital, but the management of resources throughout the entire organization. Whether you’re the CFO, CEO, or the Director of a key functional area, have you taken the time to analyze how headcount or marketing resources are allocated throughout the company? During my time with MGE, this would have been a question for not just our own operating division, but a question that Schneider Electric would have been tabling across all their brand divisions. These are the tough questions that need to be pursued when you’re really striving for optimized results.

Thanks for reading…

Jeffrey Ishmael

Inventory Planning in an A/O Environment….

August 5th, 2009 Comments off

                In some of my previous posts I’ve discussed the diligent efforts our Company has put in place to bring inventory levels down over the last year and the focus put on working capital levels overall.  However, if you are a follower of Retail or Apparel companies, you’ve probably been reading lately the shift of retailers, across all segments, to decrease their pre-book activities and move towards buying on an At-Once (A/O) basis depending on how the current season progresses. We started to see this trend in the Fall selling season, but it has become more pronounced as we moved into Holiday. It’s worth noting though that this trend is primarily occurring within the smaller retail operations, which may have 10 doors or less. This is a much more difficult, and extremely risky, proposition for the larger retail operations which are under pressure for comp performance and risk not getting the product they need to drive their comps.

 

                So what’s a manufacturer to do in such a situation?  What do you do when you’re lead times are 90-days+ out of Asia and you can’t just do a quick ramp-up in a domestic manufacturing facility? Don’t start looking through your B-school textbooks looking for the answer, because you won’t find it. Unfortunately, this is really one of those game-day calls that need to be exhaustively discussed before committing the capital. It’s an especially difficult commitment when you’ve spent the last year right-sizing your inventories, increasing the velocity of your turns, and no longer have that “problem” inventory that’s affecting your gross margin results.

 

          Do you go increase your current inventory buy based on low-volume Holiday bookings?

          Do you bring in an early release of Spring-10 product based on great verbal feedback?

          Do you offer extended dating to prompt retailers to step up to the plate for the season?

          Do you offer discounts to keep make sure you keep that valuable shelf space?

 

                Ultimately, it’s the shelf space we’re all fighting for and don’t want to find ourselves in any situation where that space is jeopardized. Especially when the smaller shops aren’t pre-booking. What are they planning on filling that space with if you don’t order the necessary product to accommodate their A/O needs?  How do you service the needs of your dealer base when they aren’t providing the necessary insights for you to make appropriate inventory decisions?

 

                It’s really a judgment call that involves the entire management team and determining the level of risk that the company is willing to take. Any poor buying decisions will effectively saddle the company with more working capital issues and poor margin performance for at least the following 2-Quarters, if not more. Unless, of course, you take the step of blowing out that inventory through your available close-out channels at a loss. Fantastic, right back in the same place you were previous to this shift in buying mentalities. So what’s your game-day call for inventory planning when you’re customers shift to an A/O purchase mentality?

 

Thanks for reading . . . .

 

Jeffrey Ishmael

Your lack of planning is not my new “emergency”. . . .

April 28th, 2009 Comments off

     It’s really amazing how quickly you can progress from a rather nicely paying Project on a Friday afternoon to a complete implosion over the course of a weekend, culminating in a withdrawal from the project. I certainly wasn’t anticipating it, but that’s exactly what happened last weekend.  The crazy part about the situation is that it was really the product of two inappropriately worded emails outlining the disappointment in progress and the lack of execution to date. Funny, while discussions had been happening the better part of 6-8 weeks, the engagement wasn’t supposed to start until May 1, and the majority of the time until now had been gratis…or perhaps “ungratis”.

     The entity I had been having discussions with was effectively a 3rd round funding candidate who had developed a pretty fantastic product, and in the characterization of any MBA student, was looking to legitimately be a “disruptive technology”.  They had been able to keep their operations lean and were making effective use of existing cash resources. However, as early as the open of Q1 it was clear that they were going to need to bring in additional operating funds. However, there was an incumbent “CFO”, who really did not have the background for the position, but nonetheless was tasked with the responsibility. Quite simply, the Company had an obligation to support this individual so long as they allowed him to remain in the position. Unfortunately for the company, and their need to aggressively pursue additional funding, there were no results on the part of the incumbent. The Company finally decided last week that they wanted to move forward with an agreement that would have me pursuing funding (#1 priority), but would also be setting the foundation for the broader finance function within the company. From the development of a new software platform, to the tracking of cost standards, the development of all their financial reporting, to representing them at certain investor events. This was all last week.

     Within the span of 72-hours after having my first on-site meeting after agreeing to the engagement, I immediately was being called to task as to why the fundraising wasn’t happening in a more agressive manner, that I had been provided all info over the preceeding 6-weeks, and questioning whether I was truly committed to the project. Did I miss something, or did we just agree on a May 1 start to the project?  The wording of the emails was also strong enough, and disrespective enough, that I knew immediately that this was not a long-term engagement I wanted to be a part of.  I was basically being held responsible for the inactions of a previous incumbent and the lack of action on the part of founders to ensure that their financing goals were on track for achievement. The situation was no different than missing key patent filings over the last quarter, hiring a new VP of Design/Engineering, and asking why patents weren’t filed….before their arrival.

     There’s no question working in the role of Finance, we are all accustomed to having to deal with emergencies and having to reprioritize tasks as conditions shift. However, there is also the element of appropriately placed accountability and following up on deliverables that were properly planned for.  It’s also quite clear, that even with proper planning, certain goals aren’t achieved, and that strategies need to be altered. However, a complete lack of planning, a lack of collaboration with current staff, and not supporting them in the necessary way does not translate as my emergency and something new players should be held accountable for. High caliber Finance consultants can provide solutions, but when the work is conducted under a condition of desperation, the results will never turn out positive, and quite often, result in the least desirable situation.

Thanks for reading . . . .

Jeffrey Ishmael

Resource Management – Steel trap or steel sieve?

April 10th, 2009 Comments off

     The last Quarter has seen no shortage of financial folks in my network asking about my perceived prospects for the rest of the year. Unlike many others out there, I am not going to make any predictions for what lies ahead for the rest of the year. As of now, I am treating each Quarter as a new battle with different conditions that will have to be dealt with and the need to employ an altering strategy. The analogy that I continue to reference is that we are living a lesson in Darwinism and only the fittest will survive. There is no room for complacency.

     With that in mind, I treat each day as an opportunity to review the deployment of our resources and determine if our capital is being utilized in the most efficient manner. Whether this is in the form of headcount, operating expenses, small capital purchases, or vendor contracts, the week:week management of these resources will determine if we are going to make our Quarter. Don’t get me wrong, I am certainly not micro-managing and losing sight of the longer-term picture by playing in the weeds all day. However, as I’ve written in a previous post, it’s about those smaller incremental Base Hits than going for the huge home run. We are managing our resources with the approach of a steel trap and not letting our results get diluted through smaller expenses trickling through because they fall below the radar.

     Fortunately, we have a great team and there is little concern that needs to be placed on our personnel. While there’s always improvements that can be made to productivity, we’ve made huge leaps over the last 8-months. Our spending is significantly down over the prior year. We’ve implemented new payment terms with vendors that allow us to take early pay discounts, which were previously non-existent. We’ve brought our inventory levels down by over 30% on a year-over-year basis, while being able to achieve an increase in sales.  These results are only achieve with a strong discipline, short-term management of resources, and a long-term goal that is clear to all employees.  There’s no question we’re operating with a steel trap mentality. How are you managing your resources ?

Thanks for reading . . . .

Jeffrey Ishmael

Sales & Ops Planning: Where do I start . . .?

September 16th, 2008 Comments off

My apologies again, but it has been a very hectic couple of weeks between a client project and possible career considerations. But let’s jump back in with a link to our last post of Sales & Operations Planning (S&OP). As I’ve mentioned, this is not a simple process and will reach across the entire organization. In my last post I outlined the significant funtional areas that will be involved in such a project. Let’s keep pushing down and look at some of the steps involved and where we’re headed in our further analysis.

Please note that each one of the areas listed below is an entire discussion in themselves and deserving of a dedicated post. However, there are 5-key steps that that fall within the S&OP process. These steps include:

1. Data Gathering.
2. Demand Planning.
3. Supply Planning.
4. Preliminary S&OP Review.
5. Executive Review.

The amount of data that will contribute to this process is extensive and will range from your closed financials, to bookings, pending projects, and other considerations potentially affecting the Forecast. The data gathering will extend into data points relative to the Production process and the ability to deliver on Forecast in the necessary time constraints. There will be various time considerations with respect to the short-term and long-term goals, both of which will be considered in this process.

When I was first brought in to be a part of this process, I had no prior S&OP experience and was a bit frustrated at being pulled away from my “core duties” and having to spend time on a process that seemed more “Production-oriented”. However, it didn’t take much more than the project introduction to see the value that this project was going to play in the validation of our financial forecasts and to bring an even higher degree of accountability and transparency to the planning process. It also further strengthened what was already a healthy relationship with the Production department. From a Finance-perspective, it allows for a much higher level of information support and accuracy in budgeting, forecasting, and more importantly, working capital management.

Thanks for reading . . . .

CFO.com Working Capital survey. Not all bad….

August 15th, 2008 Comments off

From the first summary read on the 2008 Working Capital scorecard that was published on CFO.com yesterday, you would think that the majority of the companies fell short of expectations. At a top level, working capital levels increased by 1% versus the prior year levels. Considering that these results were through the end of 2007, there was certainly an opportunity for things to deteriorate a bit more in the 4th quarter. However, what is not reflected in the summary is that these results are for only European-based companies. While they obviously have their U.S. results on a consolidated basis, which we would have been a part of the Schneider Electric figures, the figures recently released are absolutely European-centric. These results do not reflect a full global economic slowdown, as we are now starting to see.

Getting into details of the results a bit more, DSO levels have continued to fall over the last 2-years by 4.1% and 3.6%, respectively. However, this is on the heels of revenue increases of 7.4% and 10.3%, respectively, over the same period.
Interesting enough, Gross Margins were flat over the last 2-year at 32.7% and 32.6%, respectively. Considering the increase in sales, it is a concern that Inventory levels (DIO) was up 3.5% this year versus a 2.5% decrease last year. It certainly tables some interesting questions about whether growth expectations were even higher than results or if there were shifts within product offerings that left companies with an improper mix. Also interesting is the fact that gross margin levels have only fluctuated by 0.1% over the last five years with a range of 32.6% to 32.8%.
With respect to Payables, DPO increased by 1.9% in the most current year versus a 4.2% decrease in the prior year. At the current level of 45.6 days versus 44.8 in the prior year, it’s not a huge push still not as high as the 2005 level of 46.8 days.

One of the more notable figures in the scorecard released by CFO.com is the change in EBIT levels over the last 5-years. Revenue levels have increased by approximately 7.9% per year while EBIT levels have increased by approximately 18.8% annually. EBIT levels among the participants has been achieved through an effective leveraging & control of operating expenses rather than increased performance in product margins. It would be interesting to look at 2008 Working Capital proforma results with a flat to low-single digit sales increase. Also, in further review of the study, there was a huge range in results among the participating countries with respect to a total DWC metric. But we’ll dive into those comparisons in a later post…..
Thanks for reading . . . .

Finance 101 – what do the results really mean?

August 11th, 2008 Comments off

I have written a number of posts regarding questions such as “Who really owns the Budget?”, as well as speaking about my belief in developing collaborative cross-functional relationships to enhance the budgeting and forecasting efforts. It’s so easy to assume that key managers and directors should be clear about balance sheets and cash flow statements since they are always covered in even the most basic business and accounting classes, at the both undergrad and graduate level. Naturally, everyone should know the interaction between these two….right?

While I have successfully created these cross-functional relationships and have been able to have these same managers & directors embrace their budgeting efforts, they are typically not clear about the relationships between the three main financial statements. For most, the absolute bottom line question is whether we are profitable as a company. No question that this is key, but profitability does not always ensure that the company has the resources it needs to support the growth it might be experiencing. For the most basic example, lets assume a $100 million revenue company is growing at a modest 15% and produces net income of 7% per year. This gives the company, without incurring any additional debt, $7 million additional current capital to support the 15% increase.

    But what are the additional investments that need to be made by the company?

-What additional inventory will need to be added to support new growth? New product line?
-Will the company need additional sales people to invest in future sales? New sales group?
-Are their system upgrades or implementations that need to be invested in to support growth?
-Is the company outgrowing it’s current facility and needs to consider expansion?
-What inflationary increases need to be accounted for in the Budget? Wages and insurances…?
-Is the company currently servicing an existing level of debt previously incurred?

Once we start getting into the issues of working capital management and the effects on the balance sheet and cash flow, it’s quite possible that the picture may not be as optimistic. After running through just the few questions listed above it’s easy to see how quickly your profit from the year has just been whittled down, or may not even cover the needs of additional growth. It’s when the management from all functional areas understand these relationships that it becomes much easier to rally their support and involvement in the forecasting process. While your colleagues don’t need to possess the skillset to build these financial statements, their understanding and support will go far when the business environment is challenging, as it is now.

Thanks for reading . . . .

Do you know the financial strength of your customers?

July 30th, 2008 Comments off

     I’ve posted a number of commentaries regarding Working Capital and the necessity in managing this portion of your financial portfolio. A significant element is obviously the management of your receivables and ensuring that your DSO metric is maintained at a healthy level. One of the largest areas of focus each month is the top receivables outstanding and the aging report. Within this report there are always those names that we quickly recognize since we have been doing business with those customers for years, and in some cases, decades. However, in the current economic environment, do you know the current financial strength of your customers?

     We all played a role in defining the credit policies that our staff employs for the approval of new customers and the credit levels assigned.  On an ongoing basis, there’s usually no need for concern so long as the customer is paying within normal parameters. However, what happens when those payments start slipping a bit and there’s perhaps been some turnover in staff, and they’re not quite up to speed on the history of the customer?  When is the status of the customer elevated to you for further decision making? At what point do you start asking for updated financials from your customer? At what point do you track the commercial successes or failures of your key customers?  The answer to these should be that your tracking this information on an ongoing basis.

     The financial partnerships that we develop with our customers should not be centered around the initial credit approvals or the periodic payments received.  For significant customers, that partnership should be an active one and it shouldn’t be unusual or viewed as intrusive to be contacting our financial peers at our customers to request this updated information.  For customers losing significant contracts, ending strategic partnerships, or other material events, these would be a significant enough events to revisit the credit decisions made on the account and whether the original credit decision should be reaffirmed or reduced.  It’s the continued maintenance of your customer relationships that may aid you in prevention of significant bad debt exposure.

Thanks for reading . . . .