Great feature last week on BBC Radio 4’s Money Box Live about small businesses in general and with a discussion around “getting paid” in particular. I was left wondering why some large businesses insist on very long credit terms from small businesses whereas others acknowledge the reality of working in a small business.
Leaving aside the dubious legality of deliberately paying late in breach of terms (and this from companies that use “fair trade” logos as a part of their business), I wonder if this tells us something about the companies in question. If Fujitsu can deliver its margins and maintain its balance sheet whilst paying everyone on time, why should other companies which won’t (or can’t) claim the same numbers. It’s a fair assumption that given free credit, many businesses would be performing better than they currently are, so businesses that pay late are telling us not only that they’re prepared to break their obligations to others, but also their own success is partly dependent on this bad practice.
For the full programme: http://www.bbc.co.uk/programmes/b047zrks