4 ms·

Dont know if this is the hardest, but it is one of the most impactful. During the 2010 recession I had a client that had about 700K in receivables past due and

Dont know if this is the hardest, but it is one of the most impactful. During the 2010 recession I had a client that had about 700K in receivables past due and we were doing about 120K/month in additional work. I started reading their 10Q and 10K and decided that they were at risk for bankruptcy as their cash position was not great. I told my sales guy that we had to collect our money somehow. He was like they are a big public company, there is no way they will go bankrupt. I insisted. I told him we needed to start working their procurement and AP hard. We bought gifts, took them out to golf, bars, lunch, dinner, and told a ton of sob stories about how we needed the money. We managed to get our AR down to about 120K which we decided was acceptable losses. They went into bankruptcy and I was contacted by a receivables purchase company who offered to buy our 120K for 40K, so I sold them immediately. Many of the small companies that we worked with there went out of business as none of us could take such a huge receivables loss. To this day I try to get my finance team to send gifts to the AP team of our clients.

dctoedt 8y ago
> To this day I try to get my finance team to send gifts to the AP team of our clients. 1. Many, many big companies require vendors to agree to codes of conduct that explicitly prohibit such gifts. 2. If the customer were to file for bankruptcy protection, the trustee (or debtor-in-possession) likely would characterize recent payments as "avoidable preference" payments and seek to claw them back — with claw-back being the presumption and the vendors having the burden of proving that they're entitled to keep the payments (which is somewhat of a PITA). [0] 3. If the recipient of such a gift happens to be a foreign "official," then the criminal penalties of the (U.S.) Foreign Corrupt Practices Act might become salient. [1] [0] https://www.nolo.com/legal-encyclopedia/pre-bankruptcy-payments-creditors-can-the-trustee-get-the-money-back.html https://www.nolo.com/legal-encyclopedia/pre-bankruptcy-payme... [1] https://en.wikipedia.org/wiki/Foreign_Corrupt_Practices_Act https://en.wikipedia.org/wiki/Foreign_Corrupt_Practices_Act
- deleted 8y ago
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- sonnyblarney 8y ago
  In my experience, the vast majority of companies will not be reporting 'dinner' as a gift, probably not even golf. Maybe 'material gifts' i.e. things that are directly gifted that have value, but even a small basket might not get reported.

dctoedt 8y ago

> To this day I try to get my finance team to send gifts to the AP team of our clients. 1. Many, many big companies require vendors to agree to codes of conduct that explicitly prohibit such gifts. 2. If the customer were to file for bankruptcy protection, the trustee (or debtor-in-possession) likely would characterize recent payments as "avoidable preference" payments and seek to claw them back — with claw-back being the presumption and the vendors having the burden of proving that they're entitled to keep the payments (which is somewhat of a PITA). [0] 3. If the recipient of such a gift happens to be a foreign "official," then the criminal penalties of the (U.S.) Foreign Corrupt Practices Act might become salient. [1] [0] https://www.nolo.com/legal-encyclopedia/pre-bankruptcy-payments-creditors-can-the-trustee-get-the-money-back.html https://www.nolo.com/legal-encyclopedia/pre-bankruptcy-payme... [1] https://en.wikipedia.org/wiki/Foreign_Corrupt_Practices_Act https://en.wikipedia.org/wiki/Foreign_Corrupt_Practices_Act

deleted 8y ago
[deleted]
sonnyblarney 8y ago
In my experience, the vast majority of companies will not be reporting 'dinner' as a gift, probably not even golf. Maybe 'material gifts' i.e. things that are directly gifted that have value, but even a small basket might not get reported.