An interesting report from the UK on invoice settlement times and practices shows Australian businesses as being among the slowest to settle invoices – an average of 26.4 days late.
Late settlement is a cost of business to suppliers. I suspect some suppliers factor late settlement into product pricing, impacting all their customers. Other suppliers take the hit and this can hamper the future if their businesses.
Retailers need successful suppliers. Key to the success of a supplier is the on time settlement of invoices by their customers.
If you can’t afford something, don’t buy it. Suppliers don’t force retailers to purchase their product.
One thing suppliers could consider is a stronger pitch of pricing based on on-time settlement and increased penalties for late settlement.
This report from the UK is a timely reminder about the management of indebtedness and settlement off supplier invoices.