There is a growing trend from companies to press their suppliers
into accepting 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 at a time when for the most part 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 on which the customer/supplier
relationship is sustained.
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