It has been said by many that “knowledge is power”. Some have attributed the quote to the English philosopher Francis Bacon. Others opine that it originated from an old Sanskrit saying. Whatever the source, there is merit to the motto.
I had the good fortune to grow up in Houston County, Georgia. Those from outside of central Georgia easily give themselves away when they pronounce the name of the county the Texan way of “Houghston”. Locals quickly point out that it is pronounced “Howston”. Some will chip in that as Houston County, Georgia is older than Houston, Texas our pronunciation is correct. The truth is that both are appropriate in their respective locales. Houston County, Georgia was named after Governor John Houstoun (a variation on the spelling of the surname). Houston, Texas was named after General Sam Houston. The men simply pronounced their last names differently.
Knowledge indeed can be a powerful tool. One could certainly write volumes on the importance of knowledge in the law and of the law. But for the purposes of this short piece, I will touch on one area. The inherent conflict between sales promotion and due diligence present in many businesses. It is important to possess knowledge regarding your customers you intend to grant credit to.
In the modern world consumers have a wealth of knowledge they can tap into to research most any product they are interested in purchasing. Interested in buying a coffee maker, an automobile, a cell phone or most any other consumer item? There is no shortage of publications to provide ratings and reviews on the same. Yet in the business world many companies are rather careless when it comes to selling product on a net 30 basis. The pressure to increase sales and land a contract with a new customer before a competitor does oftentimes leads to sloppy due diligence. Who is this new customer? Do they have good credit? What does the seller need to do to protect their interest?
One red flag I have seen is when a new purchaser of a very common product that is readily available goes far from their home base and purchases a product in another state far from home. Why are they going so far away to make a large purchase when there are countless competitors where they are? Blinded at the prospect of a good commission, many sales departments run rough shod over such concerns to close a deal and get paid. As one of many true examples, I remember when a company located 600 miles from Macon, Georgia sent $100,000 in custom made printing to a company with a Macon address. There are probably hundreds of printers who supply this product in Georgia and in the other two other states one must drive through to get to the office of the seller from here. After the product was delivered the customer did not pay and went incommunicado. The company contacted me to investigate. It turns out the customer had a temporary address at a UPS store, one they quit using after the product arrived. The corporate name of the customer was bogus. The company had not obtained any personal information of the people they were selling to. The customer vanished into thin air. Houston, we have a $100,000 problem!
Oddly, this scenario is much more common than one would think. It is far better to do a bit of due diligence and lose a sale than it is to make a sale, lose the product and never get paid. A lawyer can assist is providing due diligence solutions to help curtail such losses. When you need help to confirm the important details, call the one you can trust. Contact Chris today … click here.