IFO Chapter Meeting

Tampa, Florida September 9, 2014

Presentation by: Scott Tillesen

Today’s Agenda

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About Tech Data Corporation

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Accounts Receivable Management

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Cash Application

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Credit Cards

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Fraud

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Debtors Prison

And … whatever else the group would like to discuss

Accounts Receivable Mgmt.

Collection of A/R:

 Need to take a tough stand   The Seller part is done, now the Buyer needs to pay Importance of a ‘route of escalation’  Stick to a process  Have one or more outsourced steps  The value of a strong credit application  The importance of a new account process

Cash Application

 U.S. Invoicing: 22,000 invoices / $30+ million daily.

 EDI, Email, Internet, and Paper payment.

 Payment via: wire transfer 53%, ACH 10%, check 35%, credit card 2%.

 All payments made to banks*  Check by phone  Handled by Accounting Department

Cash Application - continued

 Remittance detail via EDI transaction, bank OCR or keyed, emailed files.

 Cash Application Rules: Rule #1. Application is by customer direction only.

Rule #2. If customer doesn’t supply application directions, re-read Rule #1.

 Objective of minimizing contact.

 Typical problems with misapplied credits

Credit Cards

 High-cost alternative for a low-margin business.

 Without encouragement: $200,000,000 annually.

 Tokenization for PCI compliance   Gateway / Acquirer Processor “Level” of processing: I, II, III.

 Evaluation surcharge opportunity.

 Individual customer financial performance.

Fraud Schemes – Case #1 The Pretender

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Background

End user: US Dept. of Information Sciences Product: $160,000 of HP Computers Customer: Reilly Computer Services, Tampa FL Financing: Direct payment to De Lage Landen 

Scheme

Mimic real website site, email, and purchase orders 

Outcome

Recovered the shipment, alerted Federal authorities

Fraud Schemes – Case #2 Familiar Faces

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Background

End user: Various Product: Computers Customer: Several dozen Financing: Regular supplier credit lines

Scheme

Malware intrusion to capture ID’s and Passwords Ship to freight forwarders, ultimately to Eastern Russia

Outcome

Stopped shipments in transit to freight forwarders, recovered some shipments at freight forwarders. Alerted federal authorities. Required password changes on affected accounts. Implemented additional security features.

Fraud Schemes –

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Case #3 Work at Home

Background

End user: Various Product: Computers Customer: Several dozen Financing: Regular supplier credit lines 

Scheme

Malware intrusion by fraudsters to capture ID’s and Passwords Unwitting accomplices thru www.CareerBuilder.com

Forward products to freight forwarders, then to eastern Russia 

Outcome

Recovered some shipments at freight forwarders and at the homes of unwitting accomplices. Alerted local and federal authorities. Required password changes on affected accounts. Implemented additional security features.

Fraud Schemes – Case #4: Classic Bust-Out

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Background

End User: Two Retailers Product: Computer Display Devices Customer: California Based

Scheme

Make legitimate purchases by the Customer, “arms’-length” B2B resale at a discount, dissolve the Customer business.

Outcome

Perpetrators were investigated, brought to trial, and convicted.

Jailing Debtors

 Credit in America – Initial funding & expansion Colony to colony differences Stability of statute law Efficiency of legal system  Colonial bankruptcy Halt race to file individual suits Reduce incidence of fraud Equitable distribution Provide a second chance Three colonies had debt discharge

Jailing debtors - continued

 English law creditor’s rights  Sale of personal and real property Jailing if debt unsatisfied or if potential of fraud.

Debtor’s prison Possibly were a deterrent Seldom were effective  Indentured servitude  Federal abolishment in 1833  United Nations prohibited slavery or servitude in1948

Jailing debtors – The Case of H. Beatty Chadwick

 Lawyer and respected citizen  Wife filed for divorce  She claimed he sent money out of the country  Court ordered him to retrieve the money  One year later was imprisoned  Released after spending14 years in prison when: “… incarceration had lost its coercive effect and would not result in him surrendering the money.”

Scott Tillesen Vice President Credit & Customer Care – The Americas Tech Data Corporation 5350 Tech Data Drive, MS A#-18 Clearwater, Florida 33760 Email: [email protected] Phone: 727-538-5880 LinkedIn: www.linkedin.com/in/tillesen