The Cat\'s Outta The Bag (And Your Books Don\'t Balance)

Let\'s talk about something the trade press isn\'t covering.

The library world has been focused on the big dramatic numbers: hundreds of millions in unfulfilled book orders, publishers writing off debts, nearly 800 employees laid off. Those are real. Those matter.

But there\'s a quieter crisis happening right now in library business offices across the country. And if you're a library director, business manager, or fiscal officer, you're probably living it.

Your books don\'t balance. And nobody\'s talking about how to fix it.

The Encumbrance Problem

Here's how library purchasing is supposed to work:

1. You get a budget allocation for materials
2. You create a purchase order for books
3. That PO "encumbers" the funds - sets them aside for that specific purchase
4. Vendor ships books, sends invoice
5. You pay the invoice, the encumbrance clears
6. At fiscal year end, everything balances

Here's what happened when Baker & Taylor collapsed:

1. You had open POs with B&T
2. Those POs encumbered funds in your budget
3. B&T never shipped the books
4. B&T never sent invoices (or sent invoices for books that never arrived)
5. The encumbrances are still sitting there
6. Your fiscal year is ending (or already ended)
7. Nothing balances

Your Options

Option 1: Liquidate the encumbrances

Cancel the POs, release the funds back to your materials budget. This is the cleanest accounting solution. But it means admitting those books aren't coming - and abandoning collection development work.

Option 2: Roll the encumbrances

Some fiscal systems let you carry encumbrances across fiscal years. But waiting for what? B&T isn't fulfilling those orders. The accounting gets messy fast.

Option 3: Write it off

If you had prepaid deposits or account balances with B&T, that money is probably gone. You're an unsecured creditor in a bankruptcy. Writing off those losses means documenting them properly, getting approval from your board, and explaining to auditors why library funds disappeared.

None of these options are good. They're just the options you have.

The Prepayment Problem

Some libraries maintained deposit accounts with Baker & Taylor. You'd put money on account, then draw against it as you placed orders.

When B&T collapsed, that money was trapped.

I\'ve talked to libraries with $5,000 on deposit. I\'ve talked to libraries with $50,000. Large systems might have had six figures sitting in B&T accounts.

That money is now a claim in bankruptcy proceedings. You\'ll file paperwork. You\'ll wait. You'll probably get a fraction back, eventually, maybe.

The uncomfortable question nobody wants to ask: Should libraries be maintaining large deposit accounts with vendors at all?

The Data Problem

Here\'s something that\'s not getting enough attention: what happened to your data?

CollectConnect - Multiple states used this Baker & Taylor product for their annual IMLS public library survey submissions. If your state used CollectConnect, you should be asking your state library agency what the backup plan is. Right now.

Order History - Your acquisition records lived in B&T's systems. Can you reconstruct your order history for audits, collection analysis, or proving what you were owed?

Processing Specifications - Your spine label format, your MARC customizations, your physical processing instructions - that institutional knowledge may be gone.

Selection Lists and Standing Orders - Your carefully tuned automatic shipment profiles, your curated selection lists - you'll need to recreate all of it with a new vendor.

The Stats Problem

Library directors: your annual statistics are about to get weird.

Items added to collection: Orders that were supposed to arrive didn't. Your "items added" numbers will be down, and the reason will be "our vendor collapsed" - not "we reduced our collection development efforts."

Materials expenditure: Encumbrances that didn't clear. Invoices paid for items never received. Your "materials expenditure" might not reflect what you actually acquired.

How do you explain that to your board? To your funders?

What You Should Be Doing Right Now

Immediate (this week)

1. Inventory your B&T exposure - Open POs, deposit balances, pending orders, standing orders
2. Document everything - Screenshot your account, export order history, save all correspondence, file your creditor claim
3. Talk to your fiscal officer - What's the plan for encumbrances? How are we handling the write-off?

Short-term (next 30 days)

1. Rebuild your processing specs - Document your label format, MARC customizations, physical processing preferences. Keep this locally.
2. Establish backup vendors - Get accounts set up with at least two vendors. Test small orders with each.
3. Check your state reporting - Does your state use CollectConnect? What's the backup plan?

For the annual report

1. Prepare your narrative - You're going to need to explain the numbers. "Our primary vendor collapsed mid-year" is a legitimate explanation. Document the impact.

The Bigger Problem

Here's what makes me angry about this situation:

The warning signs were there. Follett's cost-cutting after the acquisition. The warehouse closures. The sale to private investors. The cyberattack and slow recovery. The failed acquisition attempt.

Any one of those should have triggered contingency planning. All of them together? That's a vendor in distress.

But libraries don\'t have vendor risk management practices. There\'s no standard process for evaluating vendor financial health. There's no industry guidance on prepayment limits or contract escape clauses.

We just... trusted them. Because we always had.

And now 4,000 libraries are scrambling to close their books and explain to their boards why thousands of dollars disappeared.

The Cat's Outta The Bag

Here's the thing about the Baker & Taylor collapse: it revealed what was always true.

The vendor model was built on trust, and that trust was misplaced. We gave companies control over critical infrastructure - our cataloging data, our processing specs, our supply chain - and assumed they'd always be there.

They weren't. And now we know they might not be again.

The cat\'s outta the bag. You can\'t unsee this. You can't go back to assuming vendor stability.

The question is what you do with that knowledge.