An evil trend is happening in business, the 60-day payment terms. For any business receiving immediate payment from their customers, like retailers, then this is a quick and painless way to make extra profit but for suppliers it’s a threat to their very survival. Obviously not every business can force their suppliers to accept such terms, only large companies are able to force suppliers to accept these terms with the implicit threat that failure to do so result in the supplier losing a customer.
This is large companies extracting profits from their smaller suppliers its plain and simple bullying.
Of course some suppliers have responded by imposing 60-day payment terms on their own suppliers, but obviously small suppliers by their very nature of size have little choice but to accept another month without payment, upsetting their cash flow and threatening their survival! It’s a small business nightmare!
In fact this isn’t a recent trend it’ just one that the company I work for has suddenly been caught up in!
I suppose at least we should be thankful that the EU has legislated that anything greater than 60 days would be grossly unfair!
It would appear we’ve the supermarkets to thank for this wheeze, with Tesco’s leading the way back in 2008!