Tag: credit & finance

So how are Blue Book scores derived? In one word—data.

One of the more common customer or trade questions Blue Book Services frequently answers is, “Why did my company’s Blue Book Score change?” And, without pause, the inquirer often follows up with, “I pay everyone fast—my score shouldn’t be this low!”

So what really happened here? Why did this century-old company close its doors?

In the summer of 2019, H. Brooks and Company, LLC, New Brighton, MN, had entered into a definitive agreement to sell its stock and become a wholly owned subsidiary of New Harvest Foods, Inc.

Data, scores, and A/R provided sufficient warning and reason for vendors to monitor transactions and outstanding balances with H. Brooks and Company, LLC, New Brighton, MN more closely.

Every year, this Blueprints department discusses a company that closed its doors during the prior year. Our objective is to see if we, as credit extenders, can learn from the company’s decline or help reinforce processes to minimize the impact. For those who were on the short end, this case study will perhaps provide hindsight and lead to more proactive steps when the next customer begins to fail, because it will happen.

Part of the equation when considering a payment plan is a solid relationship with the customer and to ensure the plan doesn’t breach PACA trust rights. A commitment to work together will also strengthen this bond.

Charles Brown, director of credit for Hapco Farms, LLC, a grower and importer in Westhampton Beach, NY, considers accounts receivable or A/R as the biggest entry on any company’s balance sheet.

The salesperson’s new candidate for credit survived scrutiny, and its finances look good on paper.

Every credit department needs standards for setting credit and payment terms, and for what happens when payments arrive late.