“If I billed them on the first of January, the 75 days wouldn’t start ticking until the first of February so in effect they were taking 102 days – then they took a 2.5% discount for being kind enough to pay me in 102 days which is crazy!”
Jenny Lees who runs a dental supplies firm in Herefordshire tells how she was told last April by the pharmaceutical retailer Boots that they would be increasing the maximum time they would pay her from 30 to 75 days.
‘Support’ for small businesses is widespread
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I know other companies that systematically delay payment to the point where those to whom they owe the money stop supplying them. This isn’t a disincentive because, after all, business is business, and they start supplying again once the bill is paid.
The effect of this behaviour hurts a smaller company but the big company has the clout to ignore its complaints (it can always buy elsewhere). If payment is delayed, the supplier could very well go out of business.
This is one more indication that the world of business and finance is badly in need of an injection of ethics but this won’t happen any time soon.