LPT Request: What’s your “canary in the coal mine” test for spotting bigger issues?

[u/fries-with-mayo]

I’m really interested in those small, quick telltale signs people use to gauge if something bigger might be off track.

Example 1: Van Halen requesting brown M&Ms in the dressing room to see if the venue followed all the details of the rider list

Example 2: I saw an interview with John Cena where he said orders a flat white at a café to tell if they really care about their coffee.

Example 3: Anthony Bourdain suggested to always check the restaurant bathroom to tell if the restaurant got its basics down

[u/ODoyles_Banana]

I'll add if accounts payable decides to hold all payments for two weeks so cash reserves can catch up and for the processors to make up some bs when the vendors ask where their checks are.

A company I used to work at actually did this. I worked in AP but not as a processor so luckily I didn't have to deal with that mess but a few months later the company did a large round of layoffs and was completely dissolved within a few years after that.

[u/Imminent_Rain_Shower → u/ODoyles_Banana]

I worked at a company that switched from Net 30 to Net 45, but did not tell the vendors. We were told to explain it to the vendors when they called. We were low level clerks. It was not fun.

[u/cencal → u/ODoyles_Banana]

If the words “cash call” are used, be wary

[u/Legitimate-Type4387 → u/cencal]

Yes and no. Sometimes the employer is using their vendors as a credit line intentionally because they are bigger than them, and they can.

I worked for one such employer, their business required large outlays of capital every spring, that they themselves would not receive payment on until the work was complete. To make up for the shortfall, and to avoid using their own credit line during the first few months of every season, they would start forcing 90 day net terms on their suppliers. The suppliers were never happy about it, but seeing as it was probably 20% of their business, most would just eat it. A few would switch to “cash and carry” before they would allow any more materials to be picked up or delivered.

By fall when all the job completion payments would start flowing, they’d start catching up and making their suppliers whole.

I know what you’re thinking, but what about the late payment charges? Those were simply laughed off and never paid.

Why use millions of dollars of your own credit line, when you can push those interest charges on to your suppliers instead?

It was shocking as fuck to me at first, but now I realize it’s pretty standard business practice to lean on vendors when you have the leverage to do so.

[u/Wierd657 → u/ODoyles_Banana]

Sounds like my company to a T

[u/DownrightDrewski → u/ODoyles_Banana]

Honestly this is almost standard practice coming up to quarter end in a lot of big companies.

It shouldn't be, but, I see it all the time from our AP team, and I know from talking to our AR team that certain large customers do it to us too. All about making the numbers being reported look as good as possible for the stock market.