One of the fundamental challenges of A/P strategy and payment in the past (for organizations of all sizes) is that it has not been a scientific or measured exercise. Thomas’ father used to run Northern European sales arms for various US industrial equipment firms, and he would tell his staff that payments to vendors could only be paid a few days past the end of each quarter, once the firm had settled its books! This was to pull cash to central accounts, and then push it back out. In other words, it was a lot of work and supplier frustration over evanescent paper results.
When A/P Meets Common Sense: Discounting and Payment Terms (Part 2) [PRO]
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