22 May Q&A with Kevin K
Gabriel interviews our controller, Kevin Kock
Gabriel:Kevin, you’ve done a lot to help keep HUB on a solid footing financially. What would you say is the most important element for profitability?
Kevin: It really boils down to watching every detail. The most important thing is to never, ever, run out of money. Just like the game of Monopoly, when you run out of money, you don’t get to play anymore. That means keeping everything in line—receivables, spending, lines of credit—it all works together.
Gabriel: I would think keeping things in balance is very important. What about when you evaluate a customer who is asking for credit?
Kevin: We look at the obvious things like credit rating, and payment history, but we are also very interested in any signs of sudden changes of status. If a customer consistently pays in 45 days, we don’t necessarily rule them out, but if they suddenly show 45 days after consistently paying in 30, we want to know what’s going on. We also look for signs of disorganization. A disorganized business is going to be a bigger credit risk than an organized one.
Gabriel: What about our A/P policy?
Kevin: We have a proactive bill pay policy which allows us to help our customers in unexpected ways
Gabriel: What do you mean?
Kevin: We make it a very high priority to pay our bills ahead of terms and take discounts any time they are offered. We may lack the sheer size of some of the other players in the marketplace, but we make up for it by being the customer that anyone would love to have. When we negotiate terms, we can be competitive because we make it worth the vendor’s while to give us a better price. If we need to call in a favor on behalf of our customer, the vendor is more likely to cooperate. We’ve seen vendors drop everything to help out one of our customers based solely on the rapport we have developed with them over time.