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The B&T Story: "Slowest Payer in Publishing" Speeds Up

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“Slowest payer in publishing” is a nickname that publishers have often applied to Baker & Taylor, but thanks to the efforts of PMA, payments are speeding up.

Things came to a head toward the end of February. More and more PMA members were complaining to executive director Jan Nathan about payments from the largest distributor to libraries that were stretching from 90 days to 120 days to 180 days or even longer.

Worse than the delayed payments was the failure to respond when independent book publishers tried to follow up, according to many of those who communicated with PMA. “My biggest concern is not the late payments–not that I condone that–it is their lack of response to my communication,” explains David Marsh of Sea Chest Books.

Realizing how widespread the problem was, Jan Nathan personally complained to B&T’s top executives and suggested a remedy: a special PMA-members email address–IndPub@btol.com–with the promise of a reply within 48 hours.

The large backlog of overdue invoices that took months, if not years, to build up certainly can’t be dismantled in a couple of weeks. “I have had conversations with the B&T people, and I feel that they are trying to play catchup on payments but are encountering difficulties,” Jan says. But at least some PMA members have seen a thaw in the frozen payments since the email address became operational at the end of February.

“This is the closest we’ve been to being caught up with payments since the buyout [by Willis Stein & Partners]. Payments are coming slowly, but faster than they’ve been,” says Jessica Hirschman of Cookie Bear Press.

In addition, communication with the company is getting easier–at least for some PMA members. “I actually had my new account rep call up and introduce herself, and that’s never happened before,” says Lynn McGlothlin of North Country Publishing.

The amount of improvement in payment and communication seems to depend on who your account representative is at B&T, or your willingness to take it to the top. While McGlothlin has seen improvement in the way B&T deals with her, David Marsh of Sea Chest Books has had a less pleasant experience with a different account rep. “Since my email to PMA, I have received payment for the oldest invoices (122 days); however, my disappointment with B&T continues,” Marsh says. “This company has never returned a phone call. They order books every week, and several times have returned supposed overstock even as I am shipping to them.”

Anatomy of a Payment Problem

Complaints about Baker & Taylor cover a wide range, from misplaced invoices to being told by an account rep that “your check has been cut but I don’t know when we can disburse it,” having to verify payment amounts before checks are released even though B&T has an invoice in hand, needing to resubmit invoices and other payment collateral over and over again, and finding that everyone from an account rep to the CFO fails to return calls or to “check into the matter” and get back to the publisher. “I reached the CFO and he told me he would look into it,” says Hirschman of Cookie Bear Press. “It was the party line. I never heard from him again.”

What got Baker & Taylor into such an accounts payable mess is unclear. Its chief financial officer, Robert E. Agres, declined to comment for this article and says B&T’s media policy is not to comment on stories about the company.

In discussions with B&T’s top executives, Jan reports, she was told that the payment problems began in earnest in 2003, when Willis Stein & Partners acquired Baker & Taylor and discovered that the leading distributor of books to libraries had an archaic billing system that was ready to explode just like an overtaxed, ancient water heater.

Combine the flawed accounts payable system with an ill-timed relocation of the accounts payable department from New Jersey to North Carolina and chronic understaffing that predated the acquisition of B&T, and you get a recipe for payment disaster. Which, in turn, was a recipe for the communication breakdown between B&T and smaller publishers.

“Prior to the buyout, I never had a problem with Baker & Taylor,” Hirschman says. “The reps were great. You’d call and they’d call you right back with an answer. Now you have to send emails, and they never acknowledge the emails. I’ve had to call three or four times before I get a response from them.”

Most suppliers agree with Jan Nathan that B&T management is trying its best to improve, but some suspect that the company hasn’t been moving all that quickly to solve the problem. “They haven’t been doing this with their large accounts,” said a B&T supplier who requested anonymity. “They are putting a squeeze on their smaller accounts in what looks like an attempt to play the float and make more money for their investors.”

How Bad It Was

Book publishers and distributors could vie to have the worst B&T payment story. Independent Publishers Group has had to put B&T on hold six times in the last three or four months because of lack of payment, says Curt Matthews, IPG’s CEO. Others have had to wait up to a year to get paid.

Whatever the specifics, payment slowdowns have hurt independent publishers in a number of ways. Since most companies are too small to succeed by dunning for payment, some have resorted to putting the book distributor on hold until it cleaned up its accounting act, as IPG repeatedly did. But while that stemmed the flow of red ink, it also crippled sales. “Some people are getting so frustrated that they are not filling B&T’s orders–‘You pay our bill, or else’–but that’s not just hurting B&T, it’s hurting them, too,” Jan Nathan says.

And every publisher who has had trouble clearing up a billing mess not of its own making–having to resubmit invoices and reconfirm payment amounts owed over and over again, placing follow-up call after follow-up call–has had to divert time, energy, and resources from other crucial activities.

Survival Strategies

Most but not all of the PMA members who responded to an email invitation reported delayed payments from B&T; some said they’d never had a problem, and several shared solutions they had devised. (See “Doing Business with Baker & Taylor” on page TK for a roundup of firsthand testimony.)

Here are some of the survival strategies that independent publishers employ to get B&T to pay up:

Dispense with discounts.“I took away their discounts about five years ago because they were consistently behind, and I told them I would not reinstate them until they brought their account current and kept it current for 90 days,” explains Dina C. Carson, publisher at Iron Gate Publishing. According to Carson, Baker & Taylor has paid full price for her books for the last five years.

Demand payment up front.“Now I work on a cash basis with Baker & Taylor,” says Sidney Goldstein of Golden Aura Publishing and Nitty-Gritty Basketball. “This works fine, because I do not ship books until they are paid for.”

Complain to the top. IPG’s Matthews believes his complaining to top executives at the company has gotten his company better treatment, but he admits that it hasn’t solved all problems and that B&T still pays IPG late and owes it quite a bit of money.

Some industry players note that B&T has always been difficult to work with and probably always will be. These same book publishers also point out that navigating the Ingram payment process isn’t that much fun or easy, either.

“One thing that’s really important to realize is that we have two major national wholesalers. Imagine what an awful world it would be if there was only one and we had no one to turn to,” Matthews says.

Still, things are looking brighter for many independent publishers who sell through B&T. The company is not only getting back to them about payments, but is actually sending out checks and, overall, being more responsive. Judging by emails and interviews, most PMA members believe that having PMA negotiate on their behalf has at the very least helped some. What they are unclear on is whether they’re seeing a temporary reprieve in the Winter of Their Billing Discontent or something longer lasting. Only B&T can answer that question, and it is staying mum for now.

Jenny C. McCune, a freelance business writer in Bozeman, Montana, began her career in book publishing and continues to follow the industry. She can be contacted at jennymccune@imt.net.

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