Pay for the privilege of being paid by Asda
A disgruntled supplier Name and address supplied
Sir; I was concerned to read about the Pay me Early scheme being offered by Asda (The Grocer, 10 May 2008, p4). Under normal trading terms, the customer should pay its suppliers 30 days from invoice. But large organisations like Asda do not do that and in many cases stretch the payment date to 60 days, if not longer at times. The delay in the retailers settling their invoices means that the supplier has to bridge the gap through their own cash, or incur charges either from the bank or Asda. If the supplier is strong enough to adopt the same policy as the large organisations, then the suppliers down the chain are kept waiting for the same period, and that affects the general health of the economy. The idea of Pay me Early is fanciful. What Asda is offering is paying on time and very graciously charging the supplier for the privilege. It is likely that bank charges to bridge the gap could be less than the amount Asda is to charge for the early payment discount. We appreciate Asda's service is optional, but it really is about time the big companies stopped taking advantage of smaller companies and paid them promptly as a matter of course. These ridiculous schemes only make them money and cost the smaller supplier. If the old German system had been introduced, which there was once talk of, everyone would have to pay in 30 days, leading to quicker circulation in the economy and the consequential benefits that brings. The notion of paying for the privilege of receiving our money is, quite frankly, laughable.
A disgruntled supplier Name and address supplied
Sir; I was concerned to read about the Pay me Early scheme being offered by Asda (The Grocer, 10 May 2008, p4). Under normal trading terms, the customer should pay its suppliers 30 days from invoice. But large organisations like Asda do not do that and in many cases stretch the payment date to 60 days, if not longer at times. The delay in the retailers settling their invoices means that the supplier has to bridge the gap through their own cash, or incur charges either from the bank or Asda. If the supplier is strong enough to adopt the same policy as the large organisations, then the suppliers down the chain are kept waiting for the same period, and that affects the general health of the economy. The idea of Pay me Early is fanciful. What Asda is offering is paying on time and very graciously charging the supplier for the privilege. It is likely that bank charges to bridge the gap could be less than the amount Asda is to charge for the early payment discount. We appreciate Asda's service is optional, but it really is about time the big companies stopped taking advantage of smaller companies and paid them promptly as a matter of course. These ridiculous schemes only make them money and cost the smaller supplier. If the old German system had been introduced, which there was once talk of, everyone would have to pay in 30 days, leading to quicker circulation in the economy and the consequential benefits that brings. The notion of paying for the privilege of receiving our money is, quite frankly, laughable.
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