Paying suppliers in a timely manner is a moral imperative

Uncategorized Dec 18, 2017

This is an old story. A while ago the BBC reported (in this article) the food supplier "2 Sisters" was asking its suppliers for 120 days to pay and a 3% discount if it payed within 90 days. Under some circumstances it wants 134 days to pay!

The questions being asked revolve around whether this is immoral or simply unreasonable. Actually I think it is both immoral and unreasonable but it also shows incompetence on the part of the 2 Sisters management.

There is only one reason to delay payment... you don't have the cash to pay. If a business of this size (4000+ employees, £800M turnover) can't pay its bills on time then you have to wonder whether it is in a difficult financial position. If your customer is not able to pay your bills within a reasonable time what confidence can you have that they'll be able to pay them at all?

Any business should pay its suppliers promptly. It shouldn't be using them as an unsecured overdraft. Suppliers aren't there to be beaten into submission. They're vital business partners. Without them your business will struggle to supply to your customers. They need to be treated well and payment on time is vital.

This kind of behaviour is, in my opinion, bullying by a weak management team

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