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Queensland newsagents upset at change to News Limited terms

Queensland newsagents, still reeling from the impact of the suspended/cancelled T2020 newspaper distribution reorganisation, were shocked to be advised last week by News that they will be transferring from 30 day accounts to 7 day accounts.

With their marketplace particularly challenged, as identified by News Limited itself, the significant change in trading terms puts more pressure on newsagencies in Queensland.

While the News move is part of a national transition to a new circulation management model, I would have thought that the fragility of the Queensland distribution newsagent situation, made worse because of T2020, would have seen News delay the move from 30 day accounts to 7 day accounts.

News is making considerable moves to drive operational and financial efficiency within its business. It continues to deny newsagents reasonably opportunities to do the same in their businesses.

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Newspaper distribution

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  1. shauns

    All of my accounts are on 30 days for home delivery , so not sure on where they think i am getting the money from every 7 days

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  2. Mark

    Rural Press have changed to weekly statements and 7 day terms too. Between these two suppliers this is a $11,000 hit to my cash flow.

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  3. James

    Shaun, if you are are like most Newsagents you send your statements out at 30 days and then collect them (hopefully) over the next 30 days. Most News Ltd contracts state that you cant stop supply to a customer without News Ltd permission before 30 days after they receive their statement in any case. In fact most Newsagents collect their cash somewhere between 45 and 60 days from the actual date of supply. In that 45 to 60 day period before your customer pays you, you will have been expected to pay 7 News Ltd supply invoices. Good luck.

    In consolidating territories, funding this cash flow deficit is the single biggest issue potential partners need to address.

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  4. John

    Guys,
    SA has been on 7 day terms with News for at least 25yrs. Even prior to Migration it wasn’t a problem.
    The easy solution is to migrate customers to News.
    Shop traffic if the SA experience is any thing to go by will not be adversely affected.
    I suppose my last comment would be, why if you’re not going to migrate why aren’t your Newsagents billing cycles mirroring that of News & Fairfax?
    Regards

    John

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  5. Shayne

    We have been on 7 days with all major paper suppliers since we bought the business 5 1/2 years ago. Not only that we had to sign direct debits as well, so papers delivered to us Monday to Sunday are direct debited the following Friday.
    We were recently charged up front for the series of kids books and then had to wait 6 weeks for return credits because every week News Ltd ‘forgot’ to put them through to our account.

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  6. June

    20 odd years ago SA were on 7 day accounts and I billed 8 weeks in advance
    to compensate for that.
    The Tower software allowed for that and
    it was never an issue with customers as
    I just explained that we had to pay for their papers weekly.

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  7. gary

    7 days for many years here in VIC, it’s not ideal nor fair but that’s nothing new when it comes to dealing with News Limited.

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  8. carol

    My sub agents always are about 3 weeks to a monty in arreas so will have to carry them. Doesn’t seem to matter how I push for regular payments it does not happen with the servos and they are direct supplies so it not easy to stop supply.

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  9. shauns

    Carol very true woolies and coles for us being the worse of them all . And yes cannot stop them because you still have to go there with the direct supply papers .

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  10. Jenny

    They shouldn’t expect payment in 7 days until all customers have been migrated, and then those with subagents need at least 14 days.

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  11. rick

    should we be looking out our contracts to see if this is legal? I am planning a big increase in delivery fees from 1st July, looking at flat delivery fee per week regardless of number of papers delivered, including introducing a delivery fee to subscriptions deliveries. Bring it on Rupert, ive pretty much had a gutful. im in regional qld, and the only agent in town so cannot see news being to keen to pull the plug on me.

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  12. John

    Carol & Jenny
    Why are subs 3 weeks behind?
    Subs receive an account on Monday morning (returns are one (1) week behind) – no payment Friday no papers Saturday. It’s that easy.
    You’re not a bank. Customers pay by the due date or they are not customers but a leach on your bank account.
    We have Coles Express Servo’s they pay weekly. This is called credit management.
    The biggest problem with Newsagents is they won’t STOP/SUSPEND deliveries.
    Look at the Majors – News, Fairfax, ACP & Mag Shop etc subscription expires deliveries STOP. It’s not rocket science.
    Either request to migrate HD customers or have an effective credit policy.

    Regards

    John

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  13. Ross

    Carol – I understand what you’re saying. I am in regional South Australia and used to have the same problem on late payment with subbies in particular Shell (Coles Express) which is also direct supply. They used to drop behind with their payment and I would ring up the local Service station to enquire as to where my payment was. I used to listen to them and after their ‘excuse’ my answer was “You have either sold the product in which case you have the money OR you have been given a credit for any unsold/returned copies” (Their payment comes from Tassie office) I extend the terms for them from the usual subagent terms of 7 days to 14 days, after that I ring up my local Advertiser rep and tell him they will be cut off. So be it they do not complain. You should take the same attitude to all subbies. They have either sold the product or received credits. It is not like confectionery, oils or other gear that sits on the shelf. You are entitled to payment. After all, how many customers do they have where they are able to pay in three weeks to a month? Not many.

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  14. Mark

    Rather than look at whether you are a delivery agent or on direct supply, have a look at what happens to your cash flow if you have to pay weekly.

    Just because some are on 7 days does not mean that everyone should give up their current 30 day arrangements.

    Gotch and Network have our money for stock we have not sold. This situation is the opposite, we have the newspaper publisher’s money for stock we have sold and don’t have to give it to them for upto 45 to 50 days.

    Why give it up easily. Can you find something better to do with $10,000 than give it to a supplier sooner than necessary?

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  15. Mark Fletcher

    As I asked when writing about my post re the double standards by News Limited in SA: what are you going to do about it?

    Will newsagents actually fight for themselves?

    Here’s the other post: http://www.newsagencyblog.com.au/2013/05/24/double-standards-in-news-limited-south-australian-move/

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  16. Jenny

    John, our returns are picked up Monday afternoon and subs receive their bills Thursday or Friday. The newsagents pay the following week, some smaller subs pay weekly, some monthly.
    Very rarely we stop subs, when we do they usually pay immediately, but in some cases we have lost money.
    Our distribution business is not run with military precision, too many other factors affect it and the time we give to the paperwork – cars break down, drivers don’t work out, supply isn’t what is expected so adjustments need to be made, there is also a busy newsagency to run and family issues can interfere with your business, so some weeks subs get away with more than they should.
    Our home delivery accounts go out monthly, if 2nd bill (30 days) isn’t paid after two weeks I stop delivery.
    I look forward to News migrating their accounts but don’t know when that will happen in NSW. In the mean time we get all new home delivery customers to subscribe.
    Unless they put you on stop, newsagents should just keep paying as they do now.

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  17. Shaun's

    I hear newsagents get stopped all the time with mags and it has happened to my self in the past ,but has anyone ever had it happen with newspapers

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  18. Amanda

    Migration is the only answer people. Don’t be scared of it. Force it. The customer gets a better deal. You get paid.

    For those of you who who do not want to migrate, it is simple, charge customers in advance. You are permitted to. Below is correspondence between my partner and Nationwide News Representative Ray Bartholomeusz:

    “You can forward bad debt customers through to the following email address and a customer service rep will follow up on the debt claim for up to a maximum of six weeks
    customerservice@nationwidenews.com.au

    A $5 fee can be added to the overdue customer’s invoice if they fail to pay within 10 days after the date on which an invoice has been rendered, you can also charge a debt collection fee to the invoice.

    Invoiced subscribers can be advised and charge one month in advance in accordance with the new 2010 agreements.

    Hope this give you some areas to work with.

    Kind regards,

    Ray.”

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  19. Jenny

    Amanda that’s interesting info from Ray, I knew about the six weeks but not the other charges. The only problem is if bad customers aren’t going to pay it doesn’t matter what fees you put on account they still don’t pay. I find most of our bad debts are customers who have been offered a cheap delivery deal thru Tele marketers.

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  20. Mark Fletcher

    True Amanda. Migration helps with home deliveries but not sub agents and this is the bigger issue for QLD agents from what I’ve been told.

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  21. Amanda

    Jenny, as Ray said, those customers can be charged one month in advance, presumably because they are on such a great rate. If they do not pay by the time the account gets to zero, simply stop the account and no more deliveries.

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  22. Amanda

    Mark, it is true, subagents are the bigger issue.

    My partner and I got out of distribution 18months ago and are still owed thousands of dollars by Coles and Woolworths. Smaller subagent sites went broke and we lost thousands of dollars there.

    We asked both publishers if we could implement stronger and tougher credit terms to subagents including requesting a bond/deposit as a preventative measure. These requests were repeatedly denied, by Fairfax Media representatives including CONTRACTS MANAGER Mr Wayne Couzins….

    Ironically, on application of becoming a retail subagent ourselves, the distributor demanded a $2000 bond.

    This is the problem with the Newspaper distribution model. It is built to serve the publisher, and the consumer. The newsagent is used and abused to absorb the costs.

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  23. Jenny

    Amanda did you, or do you know can you charge just customers on offers in advance or do you have to charge all customers the same – either in advance or arrears? (Use Tower).
    It’s something to seriously consider though I don’t know what level of complaints it will create with our customers. We send out about 900 accounts each month.

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  24. John

    Jenny,

    Thank you for describing how you handle sub returns – if I may –

    Make just 3 small but significant changes to your sub business from say Monday 1/7/2013 they’re:
    1 Change when you credit returns – make all subs 1 week behind. Not that hard really – every HD business we acquire, this is automatic.

    2 Ensure sub accounts go out with Monday’s newspapers/mags.

    3 Subs pay no later than Friday – see below.

    It takes a bit of effort but believe me within a month or so your subs cash flow will change for the better.

    Remember warn the sub that you are changing the system and you have publisher support. The subs option is to either 1/ comply or 2/ no longer a sub – don’t be afraid of this option!

    Always email/talk (keep a record) with publishers if a sub is not paying (do this early and often) and you intend to suspend. In many cases (well in SA anyway) they will go heavily into bat for you.
    Plus talk with Amanda – migration is the only for you to go.

    Regards

    John

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  25. Dennis Robertson

    Hi Jenny,

    John at post24 conducts his subagent business in a similar fashion to myself.

    Without fail our Weekly Sub-agent Accounts go out attached to the Newspaper Invoice for Monday. Whilst in accordance with the ‘RETAIL SUB-AGENCY AGREEMENT GENERAL CONTRACTUAL PROVISIONS’, (we use in SA), we could ask for payment on the first Wednesday, we generally allow Sub-agents until the COB Friday to get the payments into our account. Many do pay before Friday.

    Recently I suspended supply to a 5 day Subagent who did not pay by this time and only delivered his account with a note on the next Monday. As expected the funds were in my account by COB Monday and we re-started his supply on the Tuesday. It was an unusual step for me to take, without reference to the Publisher, but the fellow has history and I know this process will mean I won’t have to spend as much unproductive time on chasing what’s owed to me in the future.

    For people who have not met their financial obligations to you for some weeks, it may be prudent to get them up-to-date before lowering the boom on them in that manner, otherwise there is risk of a greater chance of loss.

    The benefits will come quickly and once there is complete understanding as to ‘what is the go”, a more relaxed (than before) operation may be evident.

    The juiciest aspect of Migration, for the distribution side, is the capturing of all that outstanding debt into you’re bank account (in a short space of time) and then having the Publisher pay you weekly thereafter (as part of your account).

    Have a look at the HD software for the current debt figure if any encouragement is needed to seek an early Migration from the Publishers.

    I agree with your earlier comment that 7 day accounts should not proceed until Migration, even though we had 7 day accounts with the Publisher prior to Migration.

    I believe the Publishers have a responsibility for having 30 day accounts in place for such along time and it is incumbent upon them to ease the financial burden on a large number of Newsagents by having Migration proceed before introducing the 7 day account.

    Perhaps that is News Ltd’s intention.

    If it isn’t, that would be of serious concern and at the very least the Publishers should be providing documentation to each Sub-agent via the Distribution Newsagent of changes to whatever agreement is in use in your state.

    Dennis Robertson

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  26. Jenny

    Thanks John and Dennis,
    We are billing similar to you but 14 days behind. We can’t process returns till Monday night and we receive our payment the following Monday (as opposed to your Friday). I guess that’s how we have always done things, the few that pay monthly are smaller accounts and private hospital, but none of these have are causing any problems.
    I have stopped subs in the past, money does get paid that day. One sub I am having a problem with now I have told them they will have to buy papers from our shop daily if this continues.
    We have also stopped taking on new subs, it’s not worth our time managing more small accounts and chasing money.
    Certainly agree migration makes a lot of sense, it’s always been that way with Fairfax and should be the same with News.
    Dennis, after all your advice on running distribution only and having our office at home as opposed to distribution centre, circumstances have changed so its back to the drawing board to now work out how to separate distribution from retail but with me still running both.

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  27. Amanda

    Sorry Jenny, I am not 100% sure about this. (in reference to your post The information i posted was direct from Nationwide News in NSW. I suggest you contact (via email to cover yourself) both Nationwide News and Fairfax Media in your state to see exactly what you are permitted, and more importantly what you are not permitted to do when billing customers.

    In regards to the complaints, they will be fierce in the first month, but 6months down the track your customers WILL be used to it. After all, it’s your business not theirs!

    I would think 1st July is an ideal time to implement any changes you can.

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  28. Jenny

    Thanks Amanda.

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  29. shauns

    Has anyone else had problems with News limited stuffing up their accounts , Last night was the second time in a month they have stuffed up and taken out twice the amounts that they were supposed to , just what you need when it is the same night as the lotto sweep

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  30. Paul

    Shaun , have you also been checking the amounts they are actually taking out and reconciling it with your actual received amounts ? If not you should be as they have completely stuffed up mine and owe me money currently.

    TBH Fairfax was no better and were charging me incorrectly for papers several months ago. The end result they owed me several thousand dollars. Apparently I was the first one to notice so god knows how many people also got overcharged and never noticed.

    1 likes

  31. Steve

    Reconciling magazine and newspaper account another thing every time poor newsagent knows they should be be doing.
    Let me guess, its impossible for them to return the money they have wrongly taken so you now have a credit.

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  32. Chris

    Paul, thats scary stuff what made you check? or do you check religiously? (unlike me)

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  33. Mark Fletcher

    For more than ten years I’ve put it to News, Fairfax, Gotch & Network that they should work with newsagency software companies to facilitate computerised account reconciliation. While there are finally some steps being taken by magazine companies, more work is needed sooner as this could save many hours in newsagencies every month.

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  34. Paul

    Chris I certainly don’t have the time to do regular weekly reconciliations of the paper accounts. I picked up the Fairfax one when I noticed the weekly charge had increased over what it should have been. I looked at the account and the supplies and returns looked correct so dismissed it. A couple of weeks later I thought to go back and double check the actual amount I was being charged was correct and found that I was being charged more for SMH than I was selling them for. They had been charging me the distant country rate inadvertantly rather than the city rate. Credit of approx $3500 received.

    News has just been a complete dogs breakfast tbh. I’ve been aware of numerous shortages, non supplies and non credited returns for awhile and notified them of this but nothing changed. I’m currently working through the last 8 months of accounts and returns/received papers to claim back what they actually owe since we haned back the run earlier in the year. I’m actually a little bit startled as to what the amount is starting to add up to.

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  35. Rob

    Some lucky newsagent in Qld is having their News Ltd account paid from my account. Was easy to pick up as I keep a very close eye on the financials and its 5 times the usual amount. Still its taken accounts dept 24 hours and still not fixed. Everyone check your direct debits, it may be an isolated case but better warned.

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  36. rick

    I don’t let them sweep my account anymore

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  37. shauns

    Rick i put a stop on the sweeps of my account as well .From double dipping the account to taking it out on any day of the week i just could not operate it like that anymore ,so for now on i will pay it .

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  38. Jarryd Moore

    Mark, Can you see any other reason distributors or newspaper publishers won’t wont make a move (or are very slow) on electronic account reconciliation, other than not wanting newsagents to pick up on errors in their favor?

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  39. Mark Fletcher

    One reason Jarryd is the different systems in the publishing companies. Soon this will be easier with a common platform in each company but until now poor IT at their end has been a reason they point to.

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  40. Steven

    @Paul.

    News did not give us credits for shortages for over 12 months, so we just take it off what we pay them. They don’t like it but I have records of all the reported shortages to prove it.
    Errors are ALWAYS in their favour. Too much of a coincidence to be honest.

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  41. shauns

    And stuffed up yet again ,in my world a refund would show up as a negative amount but in the world of paper giants it shows up as a positive WTF is going on

    0 likes

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