CHICAGO — Rich Domagala, vice president of Evergreen International Inc., holds up a piece of paper with one hand and with the other runs a finger down the list of names.
He also throws in a desultory chuckle, perhaps to keep from crying.
“That’s the watch list,” he said. “It’s double the length it used to be.”
“Accounts receivable” are two of the dirtiest words that produce companies in the Chicago area deal with in recessionary times.
As current economic conditions tighten on every sector of the economy, including foodservice and retail, it’s a part of a produce distributor’s business that’s becoming more and more difficult to deal with.
“It’s tough,” said Mike Ruffolo, salesman for Michael J. Navilio Inc. at the Chicago International Produce Market on the city’s south side.
“On the one hand, in this economy, you want to go out and earn new business,” Ruffolo said. “But on the other, you don’t want to take on new customers because you can’t trust them. It’s hard getting your money.”
It’s not as though customers are trying to pull one over on their distributors.
The distributors know that. Perhaps the restaurants that foodservice companies deal with are having a hard time meeting their financial obligations, and it just trickles down.
Still, as they say, business is business, and produce companies have to do what they can to ensure that they get paid so they, in turn, can continue to buy from suppliers and pay their bills.
“These days, I want at least three references from new customers,” Domagala said. “If it doesn’t check out, I don’t give them credit. You get gun shy after you’ve been hurt a few times. My (Perishable Agricultural Commodities Act) lawyer is down in Florida, and I’m in contact with him almost daily. I’m just taking a zero-tolerance stance. You can’t afford not to.”
Dave Watson, president and chief operating officer of Strube Celery & Vegetable Co., said he’s especially on the lookout for someone coming to him wanting to buy large supplies of produce out of the blue who have never bought from him before.
It could be because that person’s usual distributor cut them off, Watson said.
“Accounts receivable have been a challenge lately,” Watson said. “Everybody’s getting squeezed, and money’s going to be a lot tighter. You have to be careful.”