Cost of Sales

Let me tell you about a job I did last month ...

An approach for our smallest possible training product - one day, non-residential, and least profitable (running as an "extra" one on one day as no standard public course covers the need) lead to a day being penciled into our diary. Follow ups indicated that the offer of the day - to run more or less "at cost" in these circumstances - was going to be taken up, but in spite of several reminders, no confirmation order nor confirmation that payment would be made on the day was forthcoming. And that even included no acknowledgment of a reminder email sent on the Friday - "If you still want next Monday ...."

But that Monday came and, unscheduled, the delegate turned up. Fortunately I was able to run the day. Mind you, I insisted that the day be paid for up front, on the basis that if it took so long to raise a PO, and the delegate wasn't able even on that Monday to make a phone call to sort it out, that it would have been risky to offer credit - even though I was certain that his employer isn't about to go out of business, and that the requirement was a genuine one from the organization.

A huge sigh of relief to have job done, and payment received? Yes - except that we then got the PO through the system - about a week after delivery of the course, and with it a separate request from the delegate that we refund his payment and invoice based on this snail of a P.O. ... to be paid (no doubt) at the end of the following month, if we chased it properly through the system. A further series of emails back and forth, with an updated copy of the invoice marked "paid" but confirming that it related to the reference number shown on the the belated order was ~~demanded~~ requested, and provided. We were even asked (and declined) to re-invoice to ask for a second payment, to refund the original when the second payment came through. I felt this wasn't morally correct (and was probably illegal) - requesting payment when we had already been paid - and declined, but I did confirm that if an automated BACS system dumped a second payment into our account, we would refund one of the payments.

Booking costs / Cost of Sales can eat up a serious chunk of the cost of a course. I'll hazard a guess that answering all the twelve emails I've received from this customer, added to the multiple sets of paperwork that Lisa has had to generate, and the credit card company's commission on the payment has lead to a loss on what was always going to be a job with only a tiny profit margin. In other words, we and (indirectly our other customers) are subsidizing these people who have a system that is so out of kilter that it produces mountains of extra work, requests for dubious invoicing, and a degree of stress on Lisa and me who are cut out to provide a product, not to fight some darned system.

I am NOT identifying the organization concerned here - but suffice to say that we have done occasional business with them in the past and this sort of thing is not an isolated incident - although their Chief Executive blithely talks about how they go our of their way to look after smaller local businesses. Me thinks that the head doesn't know what the feet are doing - and me knows that we probably WILL accept future business from them, but with a heavy heart. After all - we love working with people on fabulous subjects such as PHP, MySQL (the day in question) and so on, and will take the occasional knocks to do so.

The good news is that this is a "one in a thousand" case. The majority of our customers orders go through with (- yes - a few questions and oddballs) no long series of problems, and to you all - a huge THANK YOU. Please keep your systems practical, then we can maintain our prices at their current levels. Cost of sales can - truly - be a major cost to a business such as ours.

(written 2010-06-01, updated 2010-06-02) 3beb

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23d2

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