There is a growing trend from companies switching all their Suppliers to lengthened
payment terms.
Such terms can only be served by larger organisation with adequate cash
reserves. For the small to medium supplier it further ratchets up the pressure
as Banks are unwilling to increase their credit lines.
For some time companies have sought to stretch the length of their
payment terms by all manner of means both fair and foul.
As profit margins are further squeezed by increased operating costs the
importance of maintaining cash flow is vital.
Business is hard-won in the current climate, but above all there has to
be a commercial raison d’être for any transaction.
Mutual reciprocity has to be the basis for the Customer/Supplier
relationship for it to remain worthwhile.
No comments:
Post a Comment