The traditional response from recalcitrant Debtors was “the cheque is in the post”. This generally bought some time as generally Suppliers met this response with a weary resignation.
Times have moved on and the latest mantra is “its set up for next week’s payment run”.
Basically the name of the game remains the same, buy some time - achieve a payment extension thereby effectively squeezing the Supplier’s margin.
Obviously it is a difficult balancing act between keeping the customer happy and managing your own company’s cash-flow.
However, all the signs are that the last months of 2011 will be a particularly difficult period across all sectors – it will be vital to keep full control of receivables.
Delays in payment will impact on the bottom line, however the worst scenario is that neglecting to strictly monitor a failing company could result in a total write off.
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