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PICB'S PERIODICAL DEDICATED TO MAINTAINING PROFITABILITY IN THE GRAPHIC ART INDUSTRY THROUGH GOOD CREDIT POLICIES
PRINTING INDUSTRY CREDIT BUREAU 
(847) 265-0400
ISSUE # 3
JANUARY 2012
CREDIT TIP LOGO

Did you know: that The Roadrunner could teach all of us how to be more effective credit managers?  No matter what Acme gizmo or gadget Wiley Coyote employed, lobbed, launched, or exploded, Roadrunner's instinct and intuition were superior to Wiley's tricks. Not only was Roadrunner never captured, he also managed to outsmart and out maneuver every scheme. Wiley became his own victim as all of his plans would backfire due to the Roadrunner's diligence.

 

Like a good credit manager who is ever vigilant and determined to protect profit from high risk, non paying accounts, Roadrunner's analytical skills and tenacity kept him safe from Wiley Coyote's treachery.  

 

                                                R.A.A.D.S

          Roadrunner's Anti-Acme Defense System 

Research: All customers' business information should be periodically reviewed to determine if there have been any structural changes to the company or if there is any evidence of erosion of assets, stability, or viability so adjustments may be made prior to suffering any losses

Anticipate: Credit managers should be more proactive and less reactive with customers who have been granted terms. Payment trends should be routinely tracked to better identify chronic 'slow-payers.' Once problem accounts are identified, immediate steps should be taken to cure the problem before greater losses are suffered. Consider, depending upon the circumstances, the following suggestions 1-resolution with acceptable terms, 2- adjustment of credit lines, and 3-added criteria such as obtaining personal guarantees if warranted.

Agreements: All new customers should be required to complete a credit agreement that contains a full disclosure of the existing credit terms and conditions; existing customers should be required to reaffirm their signatures annually, NO EXCEPTIONS! Customers who refuse to complete or sign applications should be considered as 'cash' customers, at best!

Due diligence: When time is a premium proper due diligence should NOT be sacrificed! PICB's credit & collection services are designed to help businesses build profit from sound credit solutions. PICB's reports are an affordable solution. They are done the old fashion way of hands on research while utilizing 21st century tools. 

Success: All too often business executives incorrectly consider 'sales' as the benchmark which defines their success. While no business can prosper without sufficient sales to support itself, neither can a business survive if sales do not become paid accounts. 'Success' is a job well done, resulting in full payment for services rendered.  

 

 

DO YOU WANT TO BECOME A ROADRUNNER?

Printing Industry Credit Bureau can help?

 

www.picb-us.com

 

 

DEWEY CHI'TING
LARSON  NY
january cartoon 
 
ORIGINAL ARTWORK BY MARC.ART, INC.
mob5948@aol.com 
 
ASK AN ATTORNEY
 
Q:  How can we best protect ourselves from print brokers, advertising companies, and other 3rd party businesses that traditionally have little by way of assets, and is there any way to bind an 'end user' to the debt should the 'middleman' not pay?
 

A: The only way to assure that you will be able to pursue the end user in reference to unpaid past due debt is to have both the middle man and the end user sign any contract, purchase order or invoice at the time that the agreement is reached to provide the services. If both parties names are on that document, then you can pursue either one or both at the time the obligation is not paid. 

 

Without both signatures on any agreement, you are left with trying to pursue various other remedies that may be legally available by claiming that the middle man is acting only as an agent for the end user, or that the middle man, if the end user is not disclosed, is an agent for an undisclosed principal. One other possibility is to pursue the end user under an unjust enrichment theory. If the end user has not paid the middle man, then they have received a benefit without payment and were unjustly enriched.

 

Although you may be able to prevail on these potential theories, obviously, you are not in as strong a position as you would be if both parties had entered into and signed the original agreement.

 

William Rinehart

Rinehart, Scaffidi, & Mathews

Milwaukee, WI 

  

A: You can only reach the end user if the end user guarantees the debt, agrees to a two party check agreement or if he does not pay the middleman.  The size of most orders do not justify such documents and it requires direct contact with the middleman's end user.  The most likely protection is to get personal guarantees from the owners of the middleman. 

 

Timothy P Philipp PC

Bridgeton, MO

 

A: Basic agency law provides that an agent cannot be held responsible for the debt of the principal unless the agent specifically agrees to become liable, either jointly or independently. That agreement must be in writing. 

 

Probably the best thing a printer can do is to get an agreement from the broker when they begin doing business with such a provision.  I have had printers and other artisans whom I have represented tell me such an agreement would "get in the way" or "will kill my business". 

 

Think about the percentage of your accounts that go to collections.  If it is relatively low, requiring a guaranty from the broker might not make statistical sense.  If your client's delinquency figure is high, you should take all steps to protect yourself.  If you aren't getting paid, you won't miss the business and will actually save your time and money.

 

Ultimately, the printer has to make an intelligent business decision on whether to require an agreement prior to doing work for a particular broker.  If you do require a Credit Application, please include provisions for finance and for collection charges in the event of a default.  That will take the financial sting out of referral to a collection agency.

 

Elliot Portman
Roe Taroff Taitz & Portman
Bohemia NY

 

A:
In the final analysis, this is a credit decision. Know your customer. In these times,more and more credit managers are insisting on personal guarantees. Better to lose a customer than to gain a defaulting debtor going down the tubes. As regards to binding the "end user",if they are not "in privity" with client, I would not hold my breath. Having said that, an assignment of the receivable could prove of some value. Good luck trying to get it.

 

Lester P. Taroff

Roe Taroff Taitz & Portman

Bohemia NY

 

A: My most realistic suggestion is to get a PG from the broker.

John Plovie
Plovie Law Firm P.S.
Redmond WA

 

A: Have the end user sign the agreement also.
 
Jon D. Totz
Totz, Ellison & Totz, PC 
CHEERS, JEERS, & NIGHTMARES
 

CHEERS: A few years ago, at the beginning of the worst recession in U.S. history, a  client contacted PICB for assistance. The printer explained that his problem was not a true collection case, but more of a mediation. The printer needed help negotiating an agreement with a customer who had fallen on tough times. The customer had printed with his company for many years so he was determined to work out the balance owed. They both knew the past due debt had become a HUGE impediment and a solution was necessary if their relationship were to continue.

                                    

The printer was faced with the facts. If the customer's company closed there would be insufficient assets to satisfy the debt. If an acceptable solution could not be achieved, the customer would more than likely go out of business. The printer's customer was a true victim of the recession. Debt was substantially disproportionate to slumping sales, and cash flow trickled in slowly, eroding the ability to get a loan in a market where the banks were rarely lending. After suffering personal asset and financial losses, whatever resources were left had been used to keep the business afloat.

 

Generally, similar circumstances would lead you to believe this tale was a 'nightmare', or a modern day tragedy rather than a 'cheer'. Instead, both our client and his customer had a mutual goal.  With a need to reach an amicable solution, a good bargain was struck.

 

While this would appear to be the end of the story. . . IT ISN'T.

 

Last September, the customer called the printer from a hospital gurney needing a small favor. He was midway thru the payment agreement and now needed a slight extension for the payment due later that month. He was actually calling prior to his emergency multiple by-pass surgery, because he was worried that his payment would be late!

 

I confess, after 35 years in this business, this call surprised and shocked me. The customer is really one of those very rare and unique individuals that you cannot help but respect. He was told not to worry and to 'get well'.  The customer has since been allowed back to work and his . payments are back on track, as well.  No one doubts, he will succeed!

 

PS: This story proves, nice guys don't finish last, they just finish what they start!

 

 

JEERS: Back in the late 70's, when I was just beginning my career, the company I worked for represented a trade association for the sporting goods industry. The following is the ONE case that I will never forget. The details are forever etched in my memory. It was an epiphany that we all come to sooner or later: some people just CANNOT be trusted.

 

The case involved a small Ohio sporting goods store that had previously been in collections. In prior cases the principal immediately resolved the debt with approved payment plans. His word was always good, and his payment plans were always honored. His reputation in our office had been good. The sporting goods store however was floundering. Like most businesses of the times (this was before the big box era) the store had its' financial ups & downs. The store had grown too rapidly and it's rapid growth impacted the cash flow negatively. At the time, we were emerging from a deep recession. Like today, banks were not offering very many loans to small businesses. The customer continued to struggle.

 

One day we had 4 clients place the store for collection with each amount being substantially large. Demand was made by phone, with faxes and emails yet to be invented. Snail mail was the alternative. Shortly after the call was made, the owners sister in law called to request more time for payment explaining that her brother in law and his entire family had been in a tragic accident.  She stated that the entire family was currently hospitalized and their son had died in the accident. Her own sister was in a coma.

 

Naturally, an agreement was made to give the the owner time to grieve and recover. 30 days later, the sister in law claimed he still hadn't been allowed to return to work. While he had just recently been released from the hospital, he had remained at the hospital to be with his comatose wife. The clients all agreed to wait another 30 days and when contacted again, the story remained the same. 

 

When asked who was operating the business, as day to day operations continued, the sister in law claimed there was a family attorney but she didn't know his name and would call me back. She then started ducking calls . . . and suspicions rose! I contacted the State of Ohio to determine if their corporate filings listed an attorney as their statutory agent, and, as luck would have it, there was. I contacted the lawyer and explained the situation. While I respected the fact that the owner was going through a terrible tragedy, the company had to resolve its debts before creditors shut the business down. The attorney burst out laughing, asking where I had gotten such an outlandish notion regarding the horrible events that had I had been told happened. This was my moment of realization, and while I felt really stupid, the tables were turned. The debtor was given 72 hours to wire the entire balance owed or the creditors were forming a committee to shut him down. The cases were all paid, and my clients all had a good laugh despite payment taking longer than normal.

 

PS: Gamers finish last, this company went out of business shortly thereafter and the sister in law was indicted for theft and embezzlement.

 

NIGHTMARES: A Member sought help after his customer disappeared. The customer boasted he was a  founding partner in a well known company and that he had made millions upon its' sale. He looked the part wearing expensive suits, and driving nice cars. The customer claimed his new company was well funded. He explained to our client that he did not want a credit line, but a good price, and would pay cash if his price was met! The printer fell for the con and lost more than $500k by shipping the job without getting payment or checking the facts. By the time PICB was consulted it was too late. The address provided was a UPS store, the car was gone, the house was sold in foreclosure, and the client was only the LATEST victim. 

 

PS: The member never recovered from the loss and the recession and is now out of business.    

  

 

 

In This Issue
CREDIT TIPS
DEWEY CHI'TING
ASK AN ATTORNEY
CHEERS, JEERS, AND NIGHTMARES
KREDIT KARMA
Quick Links  
PRINTING INDUSTRY CREDIT BUREAU CONTACT INFO: 

ANDREA SCHLACK
PRESIDENT
andreas@picb-us.com

 

DENNIS ADAMS
VICE-PRESIDENT
COLLECTIONS MANAGER
dennisa@picb-us.com

 

RICK CRUZ
CHIEF RESEARCH 
OFFICER
rickc@picb-us.com

JANET DIENES
GENERAL MANAGER
janetd@picb-us.com

 

ROBBIE BURCH

DIRECTOR OF SALES AND SERVICE

robbieb@picb-us.com

 

 

KREDITKARMA

DON'T GET BITTEN TWICE

 ******************

UNCOLLECTED

JUDGMENTS DECEMBER 2012

FOR A COMPLETE LIST

GO TO 

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RUMORS ON GRAND INC, A DISSOLVED CORP & KATHLEEN M VOGT AKA KATHLEEN TEWS

IL

  

VINCENT ALEXANDRIA, PARTNER OF WE MUST XL

MO

  

NEW YORK FURNITURE GALLERY, INC.

NY

  

NATALIE HAREWOOD, GUARANTOR FABULUSH D/B/A JOLIE MAGAZINE

NY

  

ASSOCIATED AIR PRODUCTS

 

 

FL

  

ANDREW EPERI, INDIVIDUALLY AND D/B/A AFRIQUE

IL

  

KENMAR STATIONARY

 

 

NY

  

TUMBLEWEED POTTERY

 

 

NC

  

PREMIER PRINTING

 

 

IL

  

PINATA GRAPHICS

 

 

IL

  

KARRY MATHESON INDIVIDUALLY AND D/B/A MATHESON CUSTOM PRINT

UT

  

LESTER BAFIA INDIVIDUALLY AND D MEGA FORCE PRODUCTIONS, INC

IL

  

RON CARTER INDIVIDUALLY AND D/B/A SOUTH STREET JOURNAL

IL

  

LISA DOTE INDIVIDUALLY AND D/B/A G GRAPHICS AND D/B/A PRINT THIS

IL

  

EL SOL NEWSPAPER

 

IL

 

NOVA CINETECH

 

 IL

 

BERG PRINTING ENTERPRISES, LLC D/B/A MASTERPRINT

WI

      

               

FRANK FINOCCHIARO INDIVIDUALLY & T/A LBT SYSTEMS & LBT SYSTEMS INC.

NJ

 

SEARCH 1 AMERICA F/K/A LUX PREMIER, LUX PUBLICATIONS LLC D/B/A LUX PREMIER

IN

 

SHE SKIN LLC

IL

 

HOME VIDEO STUDIO INC

IN

 

ALEX FINO D/B/ASF TRANSPORT SERVICES

PA

 

PRINT PARTNERS LTD

IL

 

DALE JASLOVE IND  d/b/a HEALTHCARE CONSTRUCTION

MI

 

HI INDIA, INC.,

IL

 

SANDESH PUBLICATIONS, INC. & HEMANT BRAHMBHATT AS GUARANTOR

IL

 

DESI TALK, INC. & HEMANT BRAHMBHATT INDIVIUALLY

IL

 

SANDESH 

PUBLICATIONS, INC.

IL

 

SY LENG A/K/A LENG SY D/B/A ECO SYSTEMS AQUARIUM

CA

 

VILLAGE FARM STAND, INC, D/B/A VILLAGE MARKET OF CALUMENT CITY

IL

 

ZOOM GRAPHICS, INC.

IL

 

THREE ANGELS PRINTING SERVICES, INC

IL

 

MY MOTHERS INVENTION

TX

 

CMY&K ADVERTISING

NY

 

CMY&K PUBLISHING

NY

 

 

  

 

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THIS MONTHS QUESTION CAME FROM SARA GALLERY AN ACCOUNTS RECEIVABLE SPECIALIST WITH  J & A PRINTING AT
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