Benefits in on-time supplier payments

It was late Friday afternoon. Joe, who is no tech whiz, had just bought an expensive new router because he was fed up with the problems arising from the cheap one supplied by his internet service provider. 

He rang his IT expert and asked for some help installing it. 

“We will need to visit you to do this,” they said. 

To Joe’s pleasant surprise the tech came out late on the Friday afternoon. After the job was completed, about half an hour after the tech should have finished work for the day, Joe thanked him for coming so quickly. 

“The boss said I didn’t need to come but I explained you always pay your bills quickly,” he said.

A café owner, who always pays his suppliers on time or early spends about $5000 a month on coffee. Recently, the price of coffee went up but not to this owner. The supplier rewarded him for his prompt payments by not increasing the price. He in turn, was able to keep his prices stable.

Is it good business to be a slow payer? What are you going to gain by holding on to your money – maybe 0.5 percent interest? It will work better for you by being a prompt payer. Suppliers are invariably thrilled to be paid immediately and are much more likely to look after you.

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