Treating suppliers fairly is part of a series of guides, developed by BERR and the Institute of Credit Management, and supported by the FPB, which provide practical credit and cash flow advice with simple checklists and tips.
Cash flow keeps business in business and if you don’t pay your suppliers on time you risk damaging their business or – worse – causing, or contributing to, their failure. You want your invoices paid on time, and you should do the same. It’s not just good business practice and ethical behaviour; it’s also a demonstration of corporate social responsibility. Can you answer yes to all these questions?
Do you agree on payment terms with your suppliers before you place an order?
Do you pay bills on or before the due date?
Do you tell your supplier immediately if you have a query with their invoice so that they can resolve the problem and still be paid on time?
Do you let your suppliers know immediately if anything is going to prevent payment by the day they expect it?
Do you make sure your suppliers know what information and detail you require on their invoices to enable you to approve and pay them promptly?
Do you check in advance where and how your supplier needs to be paid?
Five top tips
Make sure payments due are in your cash flow forecast so they don’t catch you by surprise. Talk to suppliers early if you have a problem preventing prompt payment. Paying promptly: earns your business respect may allow you to negotiate better deals or agree a prompt payment discount helps you avoid late payment or interest charges ensures supplies don’t get stopped improves your trading relationships makes you a more valued customer.
Give your key customers a copy of this guide.
Treat your suppliers as you want your customers to treat you. Other guides in the Managing Cash Flow series include : 1. Knowing your customer 2. Payment terms 3. Invoicing 4. Treating suppliers fairly 5. Credit insurance 6. Factoring and finance options 7. Chasing payment 8. When cash runs short 9. When all else fails 10. When your customer goes bust About the author These guides were written and produced by the Institute of Credit Management in association with BERR, and are supported by the Forum. For more tips on getting paid and advice on best practice in credit management, or to download all the guides in PDF format, visit www.creditmanagement.org.uk