This is an awful practise by large corporations to effectively leverage their suppliers as financiers. You can bet none of them offer the same terms to their customers. As it seems to be becoming more common, maybe there should be laws put in place to prevent this? Or as a supplier to one of these corporations, you could jack your prices accordingly to cover the cost of finance...
ubergeeknz: This is an awful practise by large corporations to effectively leverage their suppliers as financiers. You can bet none of them offer the same terms to their customers. As it seems to be becoming more common, maybe there should be laws put in place to prevent this? Or as a supplier to one of these corporations, you could jack your prices accordingly to cover the cost of finance...
I wouldn't imagine they'll pass laws against this. The government is the worst of the worst in this respect - even massive corporates can't get them to pay on time! I remember when I worked for a government entity seeing one of their Telecom bills - $330,000 for the month, $450,000 for the previous month, and an $8 late fee. Always thought it was a bit comical tacking that drop in the bucket on top of it.
Kyanar: $330,000 for the month, $450,000 for the previous month, and an $8 late fee. Always thought it was a bit comical tacking that drop in the bucket on top of it.
That's a shocker actually :/ the Govt have no good reason to not pay on time...
sen8or: Using your creditors as a bank, cheapest form of business finance there is. So long as creditors accept stretched payment terms and don't cut off supply, take as long as you can to pay them.
I refuse to do business with new clients who do this, trying to stretch things out as long as they can, if their terms are anything more than 20th of the month following I politely tell them we are unable to accept their terms and the reasons why. If its an existing customer who decides to change their terms or is just plain slack at paying their accounts on time I simply cut off supply. If I continue to have issues with a particular client letting their accounts fall past the due date continuously, I then politely tell them that payment up front will be required on the next dealing, and present them with a mobile eftpos machine.
I deal with a few large corporates, most of them I don't have a problem with regarding their terms, some of them even do payment runs every couple weeks after receiving accounts, these businesses i've found tend to be the better run ones who are not in financial trouble or running at a loss and I don't hesitate in giving them credit once a business relationship has been built.
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