Take a personal approach when you can’t pay bills, Smith advises

Share on facebook
Share on twitter
Share on linkedin
Share on email
Ken Smith

With little money coming in, many furniture retailers have no means to pay their suppliers. And the funds from most Small Business Administration loans can only be used for payroll, mortgage interest or rent and utilities – not for the cost of products just sitting in the warehouse.

Retailers need grace to defer payments until conditions improve.

Banks, credit unions, other lenders and governments require businesses and individuals that can’t meet deadlines to file deferred payment request forms. Furniture retailers who owe money to vendors, manufacturers, importers and others can take the same formal approach.

But Ken Smith of Smith Leonard Accountants & Consultants in High Point, N.C., says a personal approach can be more effective. Smith’s practice focuses on the furniture industry, where relationships matter.

Better off communicating

“You’re much better off communicating than you are not,” he said. “If you stonewall, that’s not going to go over very well. Your best shot is to ask for extended credit terms.”

That can be done by phone or by letter, Smith said. While the cause of financial distress today is obvious, it’s helpful to explain what steps you’ve taken to address it. For example, you should disclose whether you’ve applied for Small Business Administration loans or other relief. If you expect help from state and federal tax breaks, give that information. Whatever business adjustments you’ve made to improve your position should be part of the conversation.

Everyone is having similar problems and should understand accommodations must be made, said Smith, who conducts a monthly survey of new home furnishings orders.

“Somehow, we’ve got to live with this until it eases up, and we don’t know when it’s going to ease up,” he said.

 

Share on facebook
Share on twitter
Share on linkedin
Share on email
Looking to grow your business? Look no further.
Becoming a member of the HFA has more benefits than we can list here. Click the button to learn more.
Trending In

HFA Solution Partners

Myriad_HFA Solution Partner

Myriad Software continues to lead software innovation for home furnishing retailers, providing solutions to hundreds

Sherwin Williams

Founded in 1866, The Sherwin-Williams Company is a global leader in the manufacture, development, distribution,

JPSE_HFA Solution Partner

JP Sports + Entertainment is a company that is comprised of experts in the golf,

Myriad_HFA Solution Partner

Myriad Software continues to lead software innovation for home furnishing retailers, providing solutions to hundreds

Sherwin Williams

Founded in 1866, The Sherwin-Williams Company is a global leader in the manufacture, development, distribution,

JPSE_HFA Solution Partner

JP Sports + Entertainment is a company that is comprised of experts in the golf,

Genesis Credit

Genesis Credit is the Furniture Industry’s largest provider of second-look finance programs and partner to

Outward logo

Outward, Inc. is a visual transformation and technology company. Since 2012, we’ve been reinventing the

Genesis Credit

Genesis Credit is the Furniture Industry’s largest provider of second-look finance programs and partner to

Outward logo

Outward, Inc. is a visual transformation and technology company. Since 2012, we’ve been reinventing the

Sign up for more!
From HFA events to the latest member news, get updates straight to your inbox.

Not an HFA member?

Don't miss out on all of our association benefits!