[mwill]

I'm pretty confident on their soundness, they're publicly traded and I check up on clients lodgings when I can, to manage my exposure, they claim to be sitting on $400M in cash and $200M in minerals as of a few months ago.

Option 2 seems plausible, a couple years ago they had a bit of internal politics that we were caught in the middle of, the end result was changing the engineering requirements going forward over purely cosmetic issues, doubling the price of materials. One particular job we did in 2019 for $30k, was $150k in 2022, for the same exact end result for the workers, at the same site, right next to the previous one. The site manager complained, and I said if he got it in writing that they wanted to use the old engineering and disregard the cosmetics, it'd be $30k and take 2 days less, and he said they needed it done ASAP, it'd be faster to convince capex to pay the $150k than it would be to start another round of discussions on the engineering.

[caminante]

This is business process dysfunction, and I bet their AP/AR spend management software was setup wrong.

They can try to spin it as a free loan from you or the ROI gain of running a leaning team, but they're paying 400% more (150k v. 30k) in a current reporting period.

Nothing clever.

You're also sticking around and not getting burned out of repeat business. I like increasing prices to compensate and being upfront.

[yellow_lead]

> it'd be $30k and take 2 days less, and he said they needed it done ASAP, it'd be faster to convince capex to pay the $150k than it would be to start another round of discussions on the engineering.

ouch. This kind of situation could benefit from a cost savings program at that company.

[mikepurvis]

I'm genuinely curious at how a top-down initiative could succeed at rooting out this type of waste. Without empowering the cost savings to speak directly to the vendor, it's hard to imagine them being able to discover that paying a month or two sooner could get them non-FU pricing.

[caminante]

Running an RFP and benchmarking versus competitors would address this.

The problem is empowerment to question the officer who signed the deal and has the vendor relationship.

[mathattack]

Sometimes the cost and energy of the RFP means it’s only done for $500K or higher. An understaffed sourcing team has to focus on the huge deals.

[caminante]

> Sometimes the cost and energy of the RFP means it’s only done for $500K or higher.

Fair point, but that's for a different discussion.

The question was how to "root" it out, not business priorities.

If you're unable to flag and audit an easily identifiable 400% cost increase year over year and +$100k in savings, then let's be honest about the value creation of your AP/Procurement teams.

[twic]

Does "lodgings" mean something like "filings" in Australian English? As in documents lodged with the official somebody or other? Or are you snooping on their houses?

[btown]

No idea about the original post, but property real estate values for customer addresses can be an invaluable signal for confirming potential fraud, in the presence of other yellow flags on a high-end consumer transaction!

[lazyasciiart]

Yes, you lodge tax returns with the ATO.