From a supplier’s perspective the most important part of any
transaction is to ensure prompt and satisfactory receipt of funds for goods or
services provided.
When a company oversteps the mark by abusing agreed payment
terms they are in fact using the Seller’s tolerance as means of providing an
unsecured overdraft.
Put simply would you exchange a promise from your Buyer for
prompt settlement conditional on your company providing the upfront funds
enabling them to do so?
In reality by continuing to supply a persistent late paying
account this is exactly what is happening.
It is a question of commercial judgment. In these present
trading conditions business is hard won but if the transaction carries a
disproportionate risk then it isn’t really worthwhile.
The time and effort spent chasing a recalcitrant account
could be better spent elsewhere.
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