Large Companies Are Pushing the Limits

Editor’s Note: The following remarks were made on The NEWS’ group, The NEWS Network, on LinkedIn.

As a small business owner, I am seeing a trend in the way big corporations pay their vendors. Fifteen years ago when I started my fabrication business, the general standard practice was to request to be paid within 30 days of the invoice date. Later on down the road somewhere it became 45 days as larger companies began to “float” funds to add to the bottom line. Well the past two years, with the economy in a slump and banks not offering lines of credit, I am faced with large corporations pushing terms out as far as 75 days. As a small business owner there are three choices, 1) borrow money to carry the billion dollar companies while they effectively use “your” money to fund their projects, 2) you can ride it out if you have the means and 3) you simply are forced out of business.

We as small business owners do not have the ability to pass these terms onto our vendors, and if we did, we would certainly see it reflected in their prices to us. Bottom line, the arrogance of the large corporations is slowing the economic growth of America. More and more small businesses will fail as a result of this “new” standard resulting in fewer suppliers for big business. Those like myself are forced to raise prices to cover delay in payments. In the end, I expect the normal pay expectation will be capped at 90 days. I do not see it ever returning to a realistic time frame. All business big and small will be forced to add to the inflation rate and at the end of the day, the American consumer will bear the burden!

If you disagree with me, please tell me why.

Terry Roden
President at TECO Metal Products

Publication date: 10/10/2011