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IPG'S FINANCIAL CONDITION AND PUBLISHER PAYMENT POLICIES During the 30 years of its existence, IPG has never failed to pay its distributed publishers in full and on time. This has been possible because, while IPG is an aggressive marketer of books, it applies very conservative principles to its financial management. Large cash reserves are maintained in the form of short-term financial instruments, and a line of credit is always available if needed. Unlike most distributors, IPG does not pass through to its publishers any part of the income lost because of uncollected or disputed invoices. Accounts Receivable IPG has good working relationships with the accounting staffs of its customers, but in the case of the larger customers, keeping the accounts accurate is a real challenge. Returns are always difficult with larger customers because they take credits for returns well before these returns arrive in the IPG distribution center. This means IPG has to maintain an elaborate chargeback system to reconcile the inevitable discrepancies. Disputes arising from returns, co-op advertising charges, and other kinds of claims must be negotiated and settled. |
Because of its size, IPG has good leverage to collect what is owed by its customers. Still, some customers need to be reminded to pay on time, and a small percentage must be turned over to collection. Overall, IPG’s write-offs are
The statements that accompany payments sent to publishers are detailed, and any charges are supported by attached documents. Questions that publishers have about these statements and documents are resolved quickly. Payment in full for amounts due each publisher for the sales month that ended 90 days previously is sent at this time as well. Publishers who need up-to-the-minute sales data to plan reprints or promotional activities can obtain this information at any time by calling the IPG office. |
Teresa Gamboa Chief Financial Officer Teresa started working for IPG in 1989 as a parttime accountant. At that time she personally handled all the bookkeeping needs of the company. She now manages a staff of seven extremely capable people and is a highly expert user of the Great Plains accounting software.
Teresa performs the duties of any CFO at a large corporation, keeping an eye on cash flows, taxes, and payroll. In addition, she handles human resources for the company. She and her staff interact with the IPG publishers in a number of important ways. They process return credits and other billing adjustments that need to get in on time for the monthly publisher statements. Collections have to be consistent in order to get timely payments, based on terms that allow for prompt payments to publishers. In some cases, publishers set the terms for specific sales such as book club sales and foreign rights.
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