Surviving a government shutdown
February 04, 2019
4 ways a shutdown affects your business and how Ingram Micro can help.
When it comes to unexpected events—like government shutdowns—predicting the future is anyone’s guess. Will a shutdown happen? How long will it last? And most importantly: How will it impact your business, your cash flow and your customers?
If you’re a federal government reseller, you can be glad you’re partnered with Ingram Micro. We have a wide variety of resources that can help public sector partners in practically every business scenario—even the dreaded government shutdown.
What happens during a government shutdown?
#1: Products that are delivered can’t be “accepted.”
When the government shuts down, none of the contracting officers for the various agencies are working. Any products that are shipped before a shutdown may be successfully delivered to an agency’s delivery dock, but nobody is available to officially “accept” delivery and process the acceptance paperwork. So the product may have arrived, but the necessary paperwork is on hold—and without that, partners’ remittance payments won’t be processed, which delays receivables and impacts cash flow.
How Ingram Micro can help: Ingram Micro’s express warehousing and constrained inventory services enable us to hold onto a partner’s allocated products in our warehouse, instead of shipping specific orders immediately to end-user customers who aren’t in a position to receive them. This is particularly useful during larger product rollouts. The cost of this service may be a lot less than the potential cost of delivering product and having a long delay before receipt of payment. Discuss these options with your Ingram Micro representative to determine if they’re right for you.
#2: No payments can be made.
Even if products were delivered several weeks before a shutdown, if nobody’s working in the accounts payable department during the shutdown, no invoices will be paid and no checks will be cut. That could delay the repayment cycle—and seriously impact a partner’s cash flow. Ingram Micro still expects payment within the partner’s specified terms, which means partners have three choices: they either need to pay for the product out of their own cash flow (which can hurt operations), borrow against a line of credit (which begins accruing interest on day one), or simply put off paying the invoice and accrue interest on the days late.
How Ingram Micro can help: We have a large financial services portfolio that you can potentially leverage—plus a strong commitment as your business partner to help you successfully navigate challenging financial circumstances, including payment delays. To learn more, please reach out to your credit associate.
#3: With agencies closed, professional services work is on hold.
When federal agencies are closed, your technical teams can’t perform any scheduled professional services, as planned. If those individuals are on your payroll, you’re paying for their time—even though they’re not working and billing for their hours. Ideally, you could redeploy these technicians to other projects, but if you bulked up your staff for specific service contracts that are now delayed due to a shutdown, your hands may be tied.
How Ingram Micro can help: Going forward, consider using Ingram Micro’s Professional Services team and service network—a group of 750+ service providers nationwide who are available as you need them. In many cases, these resources offer more flexibility to accommodate fluctuating projects and schedules, which can be a great way to supplement your technical team with less risk of unbillable hours.
#4: No procurement officers are available to make decisions.
When contracting officers are absent, purchasing decisions don’t happen. Purchase orders aren’t cut and they aren’t released to partners—the entire procurement process comes to a screeching halt. Any end-user agencies that are waiting for products have no choice but to wait until contracting officers get back to work and begin cutting purchase orders again.
How Ingram Micro can help: While we can’t do much about the shutdown itself—or the stunted procurement process—we can help federal government partners work to diversify their businesses to minimize the impact of future shutdowns. Take advantage of the time and connect with Ingram Micro to plan your long-term business goals and explore the possibilities of expanding into new verticals, such as state and local government, education and SMB.
For more information on all of these Ingram Micro offerings, please connect with your Ingram Micro sales representative or the public sector team.