Credit, but only where it is due

Late payment. Annoying and destructive, but seemingly an inevitable part of business life, and a problem that has only become more acute during the recession.

This revealing Telegraph article about the last days of Woolworths, which is worth a read if you have a spare five minutes, contains a fascinating snippet about the retailer's wholesale arm, Entertainment UK. Apparently this business paid its suppliers in 30 days, while waiting 60 days to be paid itself. The inevitable result being a cashflow black hole. I realise this isn't a late payment problem per se, as it seems they chose to operate in that way, but it did put me in mind of some recent conversations on the topic.

The stronger print suppliers are becoming increasingly choosy, understandably, about who they deal with and there appears to be something of a shift in the balance of power between [some] printers and [some] print managers - especially those print management companies who cannot or will not pay to terms.

One print boss I spoke to this week was particularly infuriated by clients of this ilk who display breathtaking arrogance in that they don't even acknowledge the problem, seemingly carrying on as if it was perfectly acceptable to miss agreed payment schedules without so much as a by your leave or the courtesy of a telephone call. Whereas other customers with whom he has an open and honest dialogue can benefit from a little leeway, as long as it suits all parties of course.

While understanding the importance of effective cash management, it does seem more than a little rude for any client company to expect suppliers to routinely bankroll their own business as a matter of course. Tough times means business relationships are more important than ever, and I'm not surprised that printers are walking away from dysfunctional ones.