The relationship between a store and the credit department of publishing houses is very important. Bookstores order books and it’s the credit department’s job to ensure that payments get made within terms. I’ll be honest, this has not always a been an easy relationship, but lately there seems to be a greater antagonism between publisher’s credit departments and bookstores. I can only speak anecdotally, but from my own experience and those of my colleagues the relationships seem to be deteriorating.
Many stores I have spoken with have had out-and-out battles with credit departments, some over large amounts of money, but more often than not, it’s over bills under $300. There seems to be a rush to put stores on an all-cash basis rather than maintain the net 30 terms stores usually enjoy. In the interest of fairness, I sent out a seven-question email to six of my credit reps last week and not one rep has even acknowledged receiving the email, so I can’t include their thoughts in this post. ETA: Here are the questions:
The seven questions I posed to the credit reps were:
1. Has your company had to shrink the size of its credit department over the last year in response to the economy?
2. Does your publishing company put stores on credit hold first before making them go to an all cash basis?
3. Are you finding more stores in financial difficulty than in previous years?
4. Since switching to email statements (if you have) have you found people are paying more quickly or less quickly?
5. Does part of your job include  reaching out to stores and making phone calls letting them know their account is in jeopardy?
6. How many accounts is the average credit rep responsible for?
7. What’s the one thing you would like to see bookstores do to make your job easier?
I’ve spent a fair amount of time thinking about how to improve the relationship between credit departments and bookstores. Here’s my list of how I think credit departments and bookstores can work together better during these tough financial times.
– Stores should order only what they can actually pay for. Don’t sucked in by large displays or carton quantities if you might suffer buyer’s remorse when the invoice comes. Don’t think you’ll have the money in thirty days, because chances are, if you don’t have it now, you won’t have it at the end of the month.
– Credit reps might want to introduce themselves to stores before that first tense email or phone exchange about an overdue balance. If my sales reps know my name and I know theirs, we’ll actually have a relationship that extends beyond tension, and that can only be a good thing.
– Stores should make every effort to pay their bills on time, within whatever terms the various publishers have.
– Publishers should assume the best of stores that have had a good track record. Sometimes the folks who pay the bills are on vacation, sometimes life gets in the way of being timely.
– If a store finds itself in a financial bind, call your rep and let him or her know. Better to be honest right away than be forced to pay cash up front for every order.
– Publishers shouldn’t put a store on an all-cash basis without first talking to them about it before it gets out of hand. This shows a lack of trust, and to not communicate with the store and then slam them with something this big, smacks of big business trying not to deal with smaller stores. I mention this because I know several stores that have been good with their bills only to be a little late, have no communication from the credit rep and then be told they’re going to have to pay up front for the next six months or a year.
– Send in returns if you’re feeling a little strapped for cash. There’s nothing like a slow winter day to inspire me to cull my inventory and return some of the dead weight of the past year or two. Be smart about returns. Look ahead to the spring list and see who you’ve ordered the most from and return to them first.
– Stores should never have to give permission to apply account credits to any outstanding invoices. This is one of the most galling things credit departments do. I’ll get a call from a well-intentioned rep who wants to let me know that my account is a few days late and she’ll ask, “Would you like me to apply the $500 in credit you have?” Of course I do. What store says “no, please hang on to my money one more month”?
– Get your co-op done. Nothing looks nicer on a publisher statement than a bunch of co-ops to offset your bill.
– Buy smart. Take advantage of as many backlist specials as you can. Often they have better terms and dating.  But don’t buy 100 units more than you need just to get a better discount or dating, because that bill is still is going to come due.
– Ask your sales rep who your credit rep and introduce yourself to him or her.  There’s no reason booksellers can’t initiate a conversation and make contact before you find your account in any kind of jeopardy.
– A wise friend of mine said to pay bills every five days — that way, no bills have a chance to get too late.
– I don’t think it’s necessary to send slightly antagonistic emails every month reminding stores that their payments are in the lockbox by the 31st of the month, or they’ll be considered late and subject to a possible credit hold.  Angering buyers every month when they’ve done nothing wrong is really not a good way to foster a good business relationship.
I know it’s the nature of the beast between the credit department and bookstores to be somewhat tense, but I think if we all talk to each other more frequently business will be better for both sides, and that can only benefit customers who see shelves stocked high with great books.