Obama’s no lose proposition with SupplierPay

I am not going to rehash all the stuff about Obama’s big launch to help small suppliers get paid early. It was an e-invoicing vendor's banana split on a hot summer day.

Let's just say, it can't hurt.

I mean, what does Coke, J&J, Toyota, etc. have to lose? I would bet my bottom dollar that all have some initiatives already to help small suppliers – p-card programs, PO finance for small critical suppliers, dynamic discounting, reverse factoring or supply chain finance, etc.

SupplierPay builds on the federal government’s QuickPay initiative, which President Obama launched in 2011. That program mandated that federal agencies make payments to small business contractors more quickly with the goal of paying within 15 days. Of course the White House is quick to tout savings from that program. In a press release, they noted "as a result of QuickPay, we have already seen well over $1 billion in cost savings for small businesses since 2011, leading to greater investment and job creation. SupplierPay is the private sector’s equivalent, where companies have committed to pay small suppliers faster or help them get access to lower cost capital."

I don't see what the downside of helping get companies paid quicker is other than they have to pay dearly for those funds in the form of high APRs. Right now, many are paying APRs 20+ %. But so what, would you rather have money when the invoice is approved, or wait another 25 to 45 days?

Paying small suppliers early looks good for all parties involved. If the White House believes it will create jobs, help companies buy equipment, great. I say even if it speeds payments by only 25 days, that’s a big help.

My colleague over at Spend Matters Europe, Peter Smith, wrote about late payments affecting the UK market and the BBC radio documentary featuring the topic of late payments. While the documentary left you wanting according to Peter, see - Late payment – File on Four doesn’t quite get to the heart of it, we see this is a problem in many jurisdications.

Everyone likes no-lose propositions.

 

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