A Cash Flow Crisis in the Making
PRINTERS - BE WARNED!
The paper shortage is already wreaking havoc on our industry. The diminished capacity to produce paper caused by a pulp shortage amongst other issues is not anticipated to be solved easily, nor quickly! It will cause project creep along with escalating prices, leading to customer loss, drained cash flow, and diminished profits. Sadly some printers will not survive, therefore planning now how to weather this storm may in-fact help maintain profitability and survivability.
PICB has already settled several collection claims where the customer refused payment claiming ‘late delivery’ which was caused by the unavailability of paper – We anticipate there will be many more of these cases in the coming months and while we collected these first cases KNOW not all cases, will be recoverable. Some of these non-paying customers will need to be sued which will increase the Printer’s cost burden while providing no guarantee of winning and recovering the money owed. There will also be those cases where the amount is too small to litigate and the refused payment will result is a slow drip- profit loss.
PICB WISHES TO PROVIDE SOME IDEAS AND SOLUTIONS
- Update your terms and conditions regarding your paper policy on all company documents including credit agreements quotes, estimates, invoices, and statements
- Make sure your terms conform on ALL documents –
- make your policy clear as ambiguity will result in controversy
- Getting signatures wherever and whenever possible makes for clear ‘case facts’ if litigation is later required to enforce a right of payment
- If you have a ‘Force Majeure’ defined add ‘Force Majeure’ includes unavailable paper
- Add language that should you purchase and store paper stock at a customer’s request, the customer is then liable for that paper cost whether used or not
- Include a clear statement of your terms when paper requested is not available such as:
“We will do all we can to ensure the paper chosen is what is provided, however, due to an Industry-Wide shortage there will be some selections that are out of stock and/or unavailable causing a delay beyond our control.”
When We are made aware of a customer’s chosen paper is out of stock or delayed We will notify the customer promptly. Should such an occurrence happen, the customer, at their sole discretion, may make another paper selection which will affect the prior quoted price therefore We will provide the Customer a new quote reflective of the new paper selection and the Printer shall hold no liability for any price increase to the original quote, or, the Customer and at their sole discretion, may choose to wait for the availability of the paper originally selected, and in doing so assumes all responsibility for any delays in delivery thus holding harmless the Printer from any damages either real, or perceived, and for any late delivery resulting from delayed delivery deadlines, or the Customer’s at their sole discretion may be allowed to pull the job at which time the Printer will provide the customer an invoice for all and any preparatory work performed by the Printer up to that point and the Customer shall pay this invoice within the terms originally provided.
PICB welcomes any suggestion or feedback to improve printer’s business during the shortage paper crisis knocking at our door.