Registered: Nov 1999
Location: New York City
Posts: 24

Just thought I'd let you guys know...

Every order (delivered or otherwise)that HS gets is treated as CASH/Capital by the business community/bank lenders. Even *BEFORE* your CC# gets dinged, each order is treated as HS capital, which HS can use as collateral to borrow even more money from lending institutions and improve their business stature.

Every HS order, the very moment it is placedt, is called an Account Receivable. Each Account Receivable is worth $170-$260 (or whatever your purchase amount was). The business community treats each Account Receivable as cold hard cash.

I have a feeling that HS doesn't really care about filling orders in a timely basis. Rather, they are just gloating on the amount of Account Receivables they have...thus insuring success when they out their product (and future ones)in the Retail market.

[This message has been edited by PDA Newbie (edited 11-27-1999).]

Registered: Nov 1999
Location: Redwood City, CA USA
Posts: 162

Success when they "out their product" still relies on customers like you and me buying it. Personally, I don't really care how much their Accounts Receivables are; is the product any good? The product, more than any financial standing in the business community will determine any company's success. Frankly, I think Handspring's success was guaranteed as soon as they announced the Visor; before they had even a single dollar of Accounts Receivables.

Sorry PDA Newbie, I'll get off my soapbox now.

Registered: Nov 1999
Location: West Palm, FL
Posts: 53

PDA,
What you explained would only be correct if Handspring is using accruled accounting (excuse the spelling).

I don't beleive a mail order organization would use this method because they would be liable on for tax on their accounts receivable eventhough it is not collected.
If I were in this possition I would not be laughing that my A/R is huge.

I think handspring is just a new company with a decent product and they were unprepaired for the responce that it got.
I think Handspring really does want to deliver to everyone, afterall wouldnt you prefer the money in your hand than on A/R report?

Registered: Nov 1999
Location: Toronto, Ontario, Canada
Posts: 434

Even if HS were stupid enough to do that (which I don't think they are despite their problems), that wouldn't fly, because the banks are usually less stupid. Any 1 minute internet search would reveal HS's ordering problems and that a good chunk of HS's orders are bogus - duplicated/cancelled/to be cancelled.

Registered: Oct 1999
Location: St. Paul, MN USA
Posts: 22

I doubt that even 5% of Handspring's orders are bogus or cancelled. My guess is that since the web store reopened almost a month ago, they've had about 500-600 Visor orders a day. While they've still have some problem orders from September, they're currently shipping the web orders from the end of October, and will probably be meeting the 4-6 week delivery promises from here on out.

Are you:
1) a disgruntled September order?
2) a WinCE fan?
3) a 3COM shareholder?

I doubt that they're going to be hurting for money to keep the production rolling.

Registered: Nov 1999
Location: New York City
Posts: 24

QL2:

"I don't beleive a mail order organization would use this method because they would be
liable on for tax on their accounts receivable eventhough it is not collected."

But the tax won't be due until the end of the business year/quarter. However, the AR's are immidiately disposable.

"afterall wouldnt you prefer the money in your hand than on A/R report?"

Ideally yes. But if I have no product to deliver, than I sure as hell will want as many AR's so that I can build more capital and insure the company's future success.


Eug:

"Even if HS were stupid enough to do that (which I don't think they are despite their
problems), that wouldn't fly, because the banks are usually less stupid. Any 1 minute
internet search would reveal HS's ordering problems and that a good chunk of HS's
orders are bogus - duplicated/cancelled/to be cancelled."

Are you saying that the business community does not/would not have faith in HS if they knew of HS's problems? Should they have faith in HS? Should the unsatisfied customers have faith is HS? Don't you think all the answers to these questions should be the same (either yes/no)?


Bruce

"and will probably be meeting
the 4-6 week delivery promises from here on out."

You don't seem to understand that even the 4-6 week delivery time schedule (BTW I have yet to read a substantial amount of post that indicates HS adherence to this time schedule) gives HS advance capital in which to insure future retail success.

"Are you:
1) a disgruntled September order?"

No. I received 2 free blue VD's

"2) a WinCE fan?"

No

"3) a 3COM shareholder?"

No

"I doubt that they're going to be hurting for money to keep the production rolling."

Oh I doubt that too. HS is rolling in "pseudo money" which I think they are planning to use in the retail launch.

[This message has been edited by PDA Newbie (edited 11-28-1999).]

Registered: Nov 1999
Location: Wichita, Kansas USA
Posts: 14

If they do not charge your CC until the item is ready to ship how can they - "advance capital in which to insure future retail success."

It seams that there wouldn't be "advance capital"?

Registered: Nov 1999
Location: Redwood City, CA USA
Posts: 162

PDA Newbie:

I really debated about mentioning this, but what the heck. I have a friend who works at Handspring. I have known her long before she began working for Donna. She stopped by this weekend and we talked a little bit about Handspring.

She told me that they have set aside the bottom line (including profits) so that they can try to regain people's confidence in Handspring and the Visor. Right now their focus is simply making their customers happy. We also talked about the reasons they are in their current position, but I won't bore you with that as the reasons have already been posted on their website (yeah, they were all true). Trust me, Handspring's actions are sincere as she was talking to me as a friend, not a customer calling a toll-free number.

Besides, if they were just interested in taking orders and increasing their Accounts Receivables, then why would they stop taking orders from the entire country of Canada. That must have been good for at least $50,000 pseudo-dollars a day.

Registered: Nov 1999
Location: Toronto, Ontario, Canada
Posts: 434

That's good to know and it's just what I thought. There are too many conspiracy theories on the net.

But wait... you could be some Handspring plant to aid in their conspiracy to take over the world... <img src="http://www.visorcentral.com/visor/discussion/icons/icon12.gif">

Anyway, I called their order desk today to check up on things. I feel kind of bad for the grunts. The phone guy was very polite and apologetic but sounded very nervous, as if he expected me to chew him out. I was very polite in return, but I wonder if now every second call is from an irate person.

Registered: Nov 1999
Location: New York City
Posts: 24

tecwritr:

it's very simple...

each order = "account receivable" (AR)

The business community treats each AR as cash. The procedure allows companies to finacially strenghten themselves before actually being paid by each customer. Ideally, the waiting period is somewhere under 2 weeks at the most.

But is HS's case, it seems they have had the benefit of using the finacial benefits of quite a few AR without delivering the product for 8+ weeks.

But hey I might be wrong. As one of the poseters said, IF HS was truely evil, they continue taking Canadian orders.

Hey, just because I bring this up doesn't mean I am HS bashing. Hell I still consider myself a supporter of HS...

Registered: Nov 1999
Location: New York City
Posts: 24

Eug:

you didn't answer my question (not that you have to anyway). You said that it would be stupid for HS to use AR's because banks are "smart" and would figure out that HS had delivery problems. (presumably this would lead the banks to have less/no faith in HS).

So if this is the case that the "smart" banks have less/no faith in HS after a short internet search, what does that say for the consumers that have (or lack) faith in HS?

Registered: Nov 1999
Location: Fresno, CA USA
Posts: 2

Might I make a comment here regarding Accounts Receivable. I'm a CPA so I feel I can answer questions in this area.

Accounts Receivable are not recognized until the order is shipped NOT when it is received. Sales orders do nothing but commit current inventory.

Handspring IS on the accrual basis (i.e. they have inventory and A/R) so the proper recording of this transaction in Accounts Receivable would not take place until AFTER the order is shipped.

BTW, LOVE MY VISOR! Worth the hassle and the wait!

Registered: Oct 1999
Location: Ottawa, Ontario
Posts: 12

Also, under GAAP (Generally Accepted Accounting Principles), a rule of conservatism exists. That is, only recognize revenue when payment can be resonalble guarrentied. Generally, that would be when you got a cheque in the mail, or credit card charge.

Another fact is that Handspring would have to make an account "Allowance for Returns", or fly by the seat of their pants. I'm gessing that they are not orgnized enough to use option one.

Gil

Registered: Nov 1999
Location: West Palm, FL
Posts: 53

Kwheler,

Thank you, I had a suspision that orders didnt equate A/R, but I wasn't sure.

Thanks for resolving PDA Newbie's business model he had so nicely designed for Handspring.

BTW, I'm glad you love your Visor. I'm happy with mine also and Handspring did indeed do it in 4 weeks to the day.
I does apear from the receive log in another post that most orders are holding to the 4 week delivery rather than the 6 weeks.
This is not too say some are not still waiting beyond the 6 weeks but it does show Handspring is correcting their delivery times.


[This message has been edited by QL2 (edited 11-29-1999).]

Registered: Nov 1999
Location: New York City
Posts: 24

First of all, any first year business/MBA student(or in my case, any AP High School student) knows that under the GAAP, accruled accounting is the only method allowed for businesses dealing with inventory. Second of all, AR's *CAN ABSOLUTLEY* be used as collateral once each AR is "sent to shipping". The product DOES NOT have to be "on the road" in order to make use of the AR especially if the shiping dept. is not part of the the company itself but rather a bailee. [Considering HS's problemscoordinating their outsourced customer support with the shipping dept., I would not all be suprised if they outsourced their shipping duties as well.

As for the person that spoke with a friend that works at HS...what can I say? If that one person says that HS is on the up and up...then in his/her mind, they probably are

Registered: Nov 1999
Location: West Palm, FL
Posts: 53

PDA Nwebie,

YOu better stay in High School, and please get advise from yor accounting teachers!!!!!!!!!!!!!!!!!!!!

I've been self employed for 11 yesrs and have been out of school for some time but most still hold on too some of it. You need to see what what business is really about than yo may understand.

Give us a note when you finish your schooling , start a business and then we will listen. academics and real world are two different things.

Registered: Oct 1999
Location: Dallas, TX, USA
Posts: 70

Give me a break! I, too, took Acct101, and while I'll leave the arguing of proper accural accounting procedures to the professionals, I find this completely ludicrous.

For the principals in a start-up to sit down and say to themselves... "you know, if we were to piss off the first month's worth of customers by not shipping the product, we could use those A/R's to fund more production...", COME ON! That kind of lunacy would have resulted in them being placed in a round rubber room with really stylish white coats with long sleeves. I'd imagine the LAST problem these guys have to think about is capital. Given their reputation, and breatkthrough technology, I'm sure it took them less than a dozen phone calls to gather the needed capital.

I've been just as hacked at HS over the delays in my order as the next guy. (Well, maybe not as hacked as the still outstanding September orderers, but still....) But I can't call any of it some sort of conspiracy. Incompetence, maybe. Short-sightedness, definitely. But conspiracy? Give me a break. And I believe in UFO's, and don't believe the single-bullet theory for a minute. :-)

Registered: Nov 1999
Location: Redwood City, CA USA
Posts: 162

PDA Newbie:

"As for the person that spoke with a friend that works at HS...what can I say? If that one person says that HS is on the up and up...then in his/her mind, they probably are"

I'm that person and what is THAT supposed to mean? You don't know my friend. You don't know her position at Handspring. You don't know the caliber of her person. For you to insinuate that Handspring's positive efforts (seen by most) are somehow just in her head is insulting. I only mentioned her because I thought it would be nice if VC members got some "straight scoop", not something from Handspring's website or an overburdened CSR.

It's obvious that you are clinging to some paranoid theory that Handspring is the anti-Christ of PDAs and from reading the posts on this thread, it doesn't appear that anyone is buying it.

How can you call yourself a "supporter of HS"? I paid 500 dollars for my 2 visors and give praise to whomever asks. You paid nothing for your 2 Visors and give accusations of wrongdoing.

If you really disagree with the company's policies and direction, give them their freakin Visors back!

Registered: Nov 1999
Location: West Palm, FL
Posts: 53

rtalain,

Well said and I agree whole hartedly. I also bought 2 VDX and I love them, I didnt love the wait but it is a good product it works as they said it would and I think they have made some good steps in processing deliveries, atleast it appears most are getting them in 4 weeks acording to the Visor receive log thread. I, like you paid for mine also and have no complaints.

Enough said and I now think it is time to close this thread.

[This message has been edited by QL2 (edited 11-30-1999).]

[This message has been edited by QL2 (edited 12-01-1999).]

Registered: Nov 1999
Location: Wichita, Kansas USA
Posts: 14

rtalain/QL2

Well said!!!!!!!!!!!!