It’s a very simple concept, but it can have a huge impact on business decisions when executed properly.
For more than 100 years, Blue Book Services has been the leader in providing credit and marketing information for the fresh fruit and vegetable industry. By synthesizing financial and rating information, Blue Book has continuously provided credit data to all segments of the industry’s supply chain so that well-informed business decisions can be made.
And now, they have come up with a better and faster mouse trap.
Jim Carr, president/CEO, recently explained the new effort by the Blue Book which gives members real time access to accounts receivable aging reports. The new feature has some bells and whistles but at its core any company that electronically submits its own AR aging reports to the Blue Book credit team receives digital access to the aggregate report. Of course, the creditors’ names and specific information are omitted but these real-time electronic credit reports offer the most up-to-date information available.
Carr calls it a win-win for the industry, as it allows a selling or buying decision to be based on current financial information He stands by the Blue Book’s traditional method of gathering information from thousands of businesses and said those regular submissions remain extremely valuable in creating an overall picture of any company’s financial health. There are literally thousands of companies in this industry and millions of transactions in almost any given time span.
The Blue Book staff continually gathers that information and uses various measurements from the aggregate information to determine a company’s financial credit worthiness, rating and pay trends. This system has worked well since the firm was founded in 1901 and continues to be the backbone of its business model.
In July of 2016, Blue Book Services unveiled this new effort to literally harness the power of AR Aging Reports to deliver an instant snapshot of how a company is currently performing. The feature is fully functional with contributor growth on the rise. “We have major grower-shippers and distributors from throughout the country participating and giving their colleagues the benefit of AR Aging Reports.”
Blue Book typically receives these aging reports from participants on a monthly basis, at various times during the month according to each firm’s own accounting system. Usually they are received on the first of the month, the 15th or the end of the month. In turn, the Blue Book updates the aggregate AR Aging Report on a daily basis, and again any firm that confidentially shares its information with the credit service gets access to the report.
Carr reiterated that the report comes with no names affiliated with any specific debt to protect the seller’s anonymity. He calls it another tool to improve credit decisions.
“The ratings and financial information (in any edition or on the on-line version of the book) are very accurate but it’s a rear view mirror look,” he said. “It basically tells you how the company performed in the preceding months. The Aging Report can give you information on current trends.”
The Blue Book executive said it is a fair question to ask if a real time AR Aging Report challenges a rating. “I don’t see it that way. They, in fact, complement each other.”
He explained that while a real-time aging report does give a great snap shot of what’s happening with a company in the short term, it doesn’t replace the careful consideration that goes into creating a longer view look at the firm’s business practices and financial situation. Both are tools to gauge their credit worthiness and both are accurate, even if they sometimes paint a little different picture.
The new A/R Aging Report program has garnered quick support from the industry.
Linda Schroeder, credit manager for Church Brothers Farms, Salinas, California, called the effort “an important additional tool that we can utilize to make good credit decisions and also assign appropriate credit lines. She urged others to participate in the program, noting that the addition of this data allows everyone in the credit field to make smarter decisions concerning a customer’s credit worthiness.
Another Salinas Valley firm, Coastline Family Farms, has also been participating in the program. “It gives an up to date picture of how a company is paying,” said Accountant Kathy Hulette. “When a potential customer is applying for credit, it is a great tool to use when making the decision on whether to take them on or not. You can also check on existing customers when their payment practices start to fluctuate.
Salesman Jeff Walker of T C Marketing Inc., Napoleon, Ohio, commented on the ease of participation. “It takes me less than one minute, once a month, to fulfill our commitment to a better produce industry. Our hope is that more companies contribute so the Blue Book can grow and enhance this valuable resource feature.”
From Nogales, Arizona, Christopher Ciruli, chief operating officer of Ciruli Brothers LLC., summed up the new program and the importance of a robust credit system. “As a company, we have found Blue Book an invaluable resource to keep us up to date on trading member information and other relevant news that impact our business. We have relied on Blue Book for over 50 years and will continue to do so on account of the information and insights that Blue Book provides.”