Suppliers best customers can be the worst to deal with - survey

The supplier survey provides insight into what companies are facing in keeping their best, and often biggest, customers happy. Specifically, Taulias survey found that on average 47% of suppliers were paid late. The late payments averaged 9.3 days, with 25% of respondents waiting more than 40 days to be paid, Taulia found. The survey included 1,639 suppliers with almost 62% of them small to mid-sized companies with less than USD 250 million in annual revenue.

Twenty percent of suppliers had discounts taken, even after an early-payment-term date had passed, or what Taulia simply calls taking an unearned discount.

Taulias survey also found that suppliers have a strong desire to have the option to be paid early; regularly accept acceleration of all invoices, in exchange for a small discount; and some suppliers accept early payments in order to meet seasonal cash-flow needs.

Major companies are often deferring payments or taking unearned discounts to boost their bottom lines. Ironically, the slow pays and unearned discounts mean large companies with access to some of the lowest rates in the global capital markets are shifting the financing burden onto smaller companies that pay dearly for capital, if its available at all.

US-based Procter & Gamble captured national headlines in 2013 when it was reported the consumer goods giant would be joining a growing roster of companies making it standard practice to take longer to pay. In March 2015, Heinz was in the headlines with its zest for cost-cutting and planned merger with Kraft Foods. Company owners, 3G Capital and Berkshire Hathaway, are notorious for tight limits on employees photocopying so one can just imagine what suppliers are enduring.