The most common complaint among suppliers to small businesses including small business newsagents is late payment of accounts and poor communication relating to late payment.
Trading terms are set by suppliers and agreed by their customers as the basis of a commercial relationship. The anticipated time to pay is factored into the price. Every day an account is late is an additional cost to the supplier. Every additional step a supplier has to take is at an additional cost to the supplier.
I am talking here about suppliers of products where newsagents have full control over what they purchase and when. I am hearing too many stories of suppliers suffering because they are being paid late and attempts to contact their customers to discuss payment are ignored.
There are some suppliers who factor the cost of collecting payment from some recalcitrant newsagents into their pricing for all. Yes, some among us are causing all of us to pay more. This is appalling.
I know of a situation where a supplier agreed to give a business owner additional time, an extra 60 days, to pay for an opening order. When the payment was due, the supplier called, emailed and wrote and never received a response. The account was eventually settled a further sixty days late when the business owner wanted to order more stock. The supplier stood their ground and declined to accept the new order saying the cost of doing business with the retailer was too great. The retailer kicked up a fuss making all sorts of claims they would denigrate the supplier.
I support the supplier’s move. They negotiated better than usual trading terms for the retailer. The retailer disrespected those and then expected it to be business as usual. Had the retailer, prior to the end of the additional time they were given, said to the supplier they could not pay on time and asked for a further extension, the situation would have been different.
If you are not able to pay a supplier on time, talk to them before the account is due to be settled. Have a conversation with them. Most suppliers I know will welcome your proactive approach. They will appreciate it and show their appreciation by agreeing to additional time.
It is when you do not respond or leave your communication too late that things get off track and you find that the relationship is damaged.
Refusing to talk to a supplier you owe money to is not a plan. It does not alter your level of indebtedness. Indeed, silence can increase the cost to you.
Suppliers should talk to their REPS . I am sick of Reps saying its ok to order while still owing money from a previous order . One particular supplier that we did get behind on but eventually paid ,we decided to place a limit on what we spent with them ,so the sales rep was in last week and continually tried his best to get us over our allocated spend .Even to the point of telling us about what his previous customers had spent and how long they take to pay them off .
Sometimes suppliers claim to have made contact about overdue accounts when they haven’t
Being a supplie to small business in a past life I found if you at lest make regular part payment it shows your honesty in paying the account, because until its payed the supplier has a liability, not an asset and a debit not a profit
Everything in the lead post is spot on.
As a small business supplier, when dealing with recalcitrant payers, I sometimes make the point in writing to small business retailers that I am a small business supplier of newspapers rather than a banker or financier for short term cash flow issues.
Sometimes it makes a difference to those with the wit to understand what I am saying.