About the Author:

With a career that has spanned advertising, production, technical services, and project management, Michael is able to articulate the wide range skills and professions that make the Internet work. This eclectic understanding and his desire to shine the light on those hiding behind techno babble has brought success to a wide range of projects.

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Past Postings:

Using Dissent To Enhance Your Social Influence Online

Industry Profile - Author

Industry Profiles Full Time Employees - Professional Writer

Some Thoughts On Freelancing

Building Your Online Brand

Marissa Mayer and the Change in Yahoo's Remote Workforce

LinkedIn for Professional Writers

Fake Republican Twitter Accounts

"Did you mean?" -- Google's chiding nanny of search results

Branded Technology

Sharingspree.com -- Stealing more than GroupOn's Idea

The Internet Isn't Entertaining Enough

It's not your bank... It's Apple's and Amazon's

Violated by Madison Avenue

Google+ Scares Me

"We need to..." Internet Marketing Myths

Facebook's deal with the Devil

My cool new phone is a little too cool.

You are never alone

Promotion vs. Distribution... You'd think they'd know that one...

Publishing Industry Watch

Content for Social Media

Social Media Slot Machine

Anonymous vs Me

News from the Twitter Follow Campaign Trail

The art of Indiscriminate Twitter Following

The Cloudy Meaning of The Cloud

The Demand For The Loss of Creativity

Alien Technology and Government Conspiracies

Time for a New Reality

The Death of Email

Protecting Free Speech... Anonymously (and geekily)

Amazon Shouldn't Have Shut Down WikiLeaks

The Superpowers of the Hive Mind

Time for New Ideas

Comcast, Netflix and the Mystery of the Modem

The Great Technical Disconnect

New for the Sake of New

A Retail Store Built Like the Web

Disposable Personas

When did Google Start Policing the Internet?

Getting back to HTML basics, thanks to Apple

Inspecting my Navel Base

A shoebox vs. an online backup

Is Your "Resume" Website Recruiter-friendly?

iBooks -- Creative Epicenter or Gatekeeper?

The Failure of Success

The Economy is Going to Get Worse, but that's okay

Time lost on Twitter

Client Vendor Relationships

Twitter's back alleys and dark places

Social Media is NOT Advertising

Microsoft Courier

Form (designers) versus Function (geeks)

PDXBOOM -- The power of social media and the portland pipe bomb

China and Apple -- Different organizations, same management

The volume of screens


Google Adds Biking Directions to Maps


That magical little tablet

How your website can be in two places at once

Masterpieces created by sheer volume

Suing over lack of originality

A Primer on Internet Fame -- dancing babies, hamsters, numa numa, and more...

Checking my messages

Rules are made to be broken -- in a reasoned, systematic way

So many accounts, so few passwords

Who really uses Twitter? 60% of Twitter's traffic isn't on Twitter

The Web is a Jerry Rigged Kludge

Twitter: Asleep at the Mouse Wheel

Where regulation is good: Google Voice and Vonage

How Facebook is (unintentionally) forcing programmers to piss off users

The Twit Cleaner

Perfect Secretary's pitch for @Adbroad (and the Youtube API)

The Emotions of Text

The Shorty Awards Scandal -- Manual Spam is still Spam

Google Analytics, the cloud and missing numbers #fail

Helen Klein Ross & Michael Bissell Interview at Adweek's Social Media Strategies Conference

The Internet is the New 60's

Cougars from New Zealand (and I don't mean big cats)

Adding facts together, or why you can't charge your cell phone from wifi

Social Media and the Destruction of the World

Rabid Fans vs Passive Viewers -- The Coco vs Leno saga

How to tell someone to retweet (without using up your 140 characters)

You can't buy social media

A book unopened is but a block of paper

Building the LOST: The Final Season Sweepstakes

Holiday SPAM (or the lack thereof)

Archiving Twitter

Too Many Toolbars

Random Censorship with Google Adwords

Accessibility and Shopping Online

Twisted path to customer service

Flash: Shiny objects blinding your audience

Twollow and other gold rush scripts

GPS in a Laptop computer

Thinking outside the box... There was a box?

Twitter was designed for Text Messaging

It's not the corporations, damnit

Entrepreneur or Dreamer?

Adweek Social Media Twitter for Brands Presentation

Socializing is more than Social Media

Generational Marketing is a Myth (or Who's your Daddy?)

Social Media is Just the Way We Use the Internet

Twitter Followers Don't Matter (ask the porn sites)

The Internet is Gooder than Books

Sometimes you don't want your campaign to go viral

Best Twitter Branding Campaign

Like flies to crap, Spammy Twitter Followers don't really go away

iPhone SMS Security Hole

How Flipmytweet works

Cell Phones as Microscopes

Digg is not the Hijacker -- You Are

Steve Ballmer -- the walking dead?

Twitter as an open mic poetry reading

Automatic Social [un]Awareness

First splash for United Against Malaria

New Media/Old Media and the CLIO Awards

Interview at SXSW: Mad Men Twitter And Tracking

We've got an App for that -- it's called the Web

Understanding Google To Get Your Resume Noticed

The trouble with Wordpress and other templates

Wayward Words with Baggage

Speaking at SXSW March 17th

The fleeting Memory of the Internet

It's okay to say 'I don't know'

Nike Takes Over Conquent

Facebook owns this title

Excuses, excuses

A little on Social Media

Feeding on Content

Attack of the Bots

Web 1.0

Net Neutrality

Getting clever with data feeds

The Other Credit Crisis

The Broadband Inauguration

T-Mobile owns Magenta and Other Patent Stories

The Risk-takers, Doers and Makers of Things

The noise of 20,000+ Twitter Followers

30,000 feet, 500 MPH Suburban Strip Mall

Cellphones, toilets and the Inauguration

The End of Days (of song): Microsoft Songsmith Example

Browser Bigotry

The Death of your Soul: Microsoft Songsmith

Creative Development or Developing Creatively?

The Myth of Wikipedia (or the Wiki-1400)

Online/Offline Sales -- is it really that bad?

Is PayPal Tacky?

Old School Web Design Still Works

Domain Squatting

Green Chri$tma$

QA 101

Portland Snow

Get some return on that web traffic

I think they have a backup...

I'd love to have that problem

The [un]importance of statistics

Don't be a tool of viral marketing

Emails, discussions, blogs, wiki and web content

You Designed for Print First

You let someone else register your domain name

You figured .biz, .info, .us would work fine

What's after the Integrated Circuit?

Intelligent life is out there (but it's bugger all down here on earth)

Subject Matter Experts Talking Other Subject Matter

The Totalitarian Regime of Apple

Oversimplifying how people work


Creative Services for the New World

Reverse Anthropomorphism

The End of Time

Better Living Through Twitter

Lessons Learned From Apple

It's the Brand, Baby

Business Architecture vs. Web Construction

On Truth

Inverse Peter Principle

Random Knowledge

The Hive

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The Other Credit Crisis
Posted: 2009-01-23 08:00:00
Shortcut URL: http://t.conquent.com/s200

We've heard a lot about the problems with the credit market -- banks aren't lending or, worse yet, they're pulling lines of credit back from good customers. I'm of the mind to play the drinking game "Do a shot every time you hear the phrase economic crisis," except for that kidney stone a couple months back...

There's another credit market we haven't been talking about, a huge slush fund of credit that's impossible to track, and one that's growing daily.

Net Terms.

Well, implied net terms. If we send out an invoice to a client, it says "Due on Receipt" unless we've made other arrangements with the client. Traditionally, however, our clients have treated that as "I'll pay in the next payment cycle, or in 30 days... or so." As long as we all expect it, it's okay; everyone knows when the money will show up, and they can manage their cash flow accordingly.

Only now clients and vendors are playing long-term credit games. For some reason not paying vendors is different than taking out a loan from a bank and not paying it. Sitting on a payable for 30, 60 or even 90 days is just fine for many business people, and the reality is the only ones who get paid on time are companies with big sticks like the banks.

As a business owner I obviously have problems with people not paying the company. We're pretty good about managing our debt, but most established companies carry a line of credit or credit card debt. If we have to tap that line of credit to make payroll or other expenses our clients are using our line of credit indirectly.

Even with the interest charges built into every contract, it's hard to recoup that cost of carrying the debt. As a business owner, you want to maintain a good relationship with your clients, especially the ones that spend (and therefore borrow) a lot of money. So, you use the interest charges as a last resort to get them to pay attention, and then waive them as part of the "thank you" for getting paid.

In the process, you discount the work or product you've already sold. It would be like knocking 20% off the invoice just because your client didn't meet the terms of your agreement. In other words, you punish your own company for the mistakes of others.

Now we're seeing a ripple effect where people aren't getting paid at all. If we have a client who slow pays us for an invoice, it causes us to slow pay the vendor we used for the project, which causes him to slow pay HIS vendors... You could be 6 degrees from the guy who didn't pay in the first place and still get screwed.

The game only works if the chain remains unbroken and everyone pays; as we get further and further out of sync from products delivered or services rendered, the chain is gets weaker.

The best solution is to have your clients secure credit directly before going into the project or delivering the product. The downside is that offering direct terms is often a deciding factor in choosing otherwise equal vendors.

Rather than making the obvious statement, maybe I'll just skip ahead to doing a shot.

Getting clever with data feeds
The Broadband Inauguration

John Bissell: Re: The Other Credit Crisis
2009-02-01 08:00:12

The line can also be broken when an undercapitalized bank decides to call in a line of credit covering the payroll. Thus the service provider or vender is bought down not by their poor management, but by doing business with a client who could not pay, and a bank who could not lend.

I know of one case where the client could not pay because the bank pulled a load it had already guaranteed to the client, then the company (vendor) used a line of credit from a different bank to cover the payroll that was short due tot he client's inability to pay. The line of credit to the vendor was then called. The client and the consultant did things right. Two banks pulled funds without cause, bringing both companies down.

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