Big companies in the UK have recently been accused of delaying payment of their invoices for unfairly long periods.
Companies normally pay on 30, 60 or 90 day terms but some of Britain’s largest corporations have been holding off paying suppliers for over 100 days.
Who’s responsible for this? Are suppliers failing to keep their receivables in check or are these big companies exploiting their suppliers?
Jeremy Corbyn, the leader of the UK labour party, believes that companies are delaying payment to free up cash on their books and are transferring risks to their suppliers. It’s a major problem for small suppliers as they have very tight operating margins.
Corbyn believes the government should introduce regulation to protect smaller suppliers and force debtors to settle their debts promptly.
The companies in question deny the accusation and claim they always treat their suppliers fairly.
Whose side are you on?
- Does your company pay on 30, 60 or 90 day terms?
- How long do you hold off paying suppliers? Why?
- Ho do you keep your accounts in check?
- How do you free up cash on your books?
- Do you transfer risks to your suppliers or customers? How do you do this?
- How tight are your operating margins?
- Do you settle debts promptly?