More than ever, all businesses operating in today’s climate need to have
constant and rigorous focus to their commercial exposure.
Against the current competitive
background it is very difficult to contemplate turning away business especially
from a customer of long standing.
However as business conditions remain
difficult we are witnessing a growing trend for companies to squeeze suppliers
in various ways. This can take the form of a decision to arbitrarily extend
payment terms, decide not to take up previously agreed deliveries or introduce
respective price discounts.
From a suppliers perspective this
erosion of operating margin means that in some instances the best business
decision was to leave it to your competitors.
When stricter controls are in place
over such elements as payment terms and credit limits the result is likely to
be a reduction in turnover.
The upside of such fiscal discipline
carries its own rewards. Avoiding defaults by customers is the surest way to
protect the company’s bottom line at a time when profits are hard won and
losses easy to establish.
No comments:
Post a Comment