In the past when
suppliers followed up on overdue payments the traditional reply from
recalcitrant debtors was “the cheque is in the post”.
This tactic generally bought some breathing space as 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, irrespective of any other consideration it is vital to keep full control of receivables.
At the very least delays in payment will impact on the bottom line; in the worst case scenario neglecting to strictly monitor a failing company could result in a total write off.
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