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Understanding and minimising the impact on suppliers of extended payment terms

Boeing’s move is just another example of a global MNC using their buying power to improve their working capital management at the expense of their suppliers. Sadly ,it is bound to happen in competitive industries - Boeing are under huge market pressures, nevertheless there are things that can be done to protect suppliers, as Ad Van der Poel, SVP, Financing Services at Basware points out: “We do need to recognise the impact this type of action has on business development. Many supplying companies will be put at risk by restricted cash flows. Every business needs to take responsibility for themselves and their supply chains, which includes reasonable payment terms. As an alternative, Boeing could address its challengewith the help of a third party or by paying its suppliers early and negotiating discounts.”

What Boeing could have done 

Here are some of the things Boeing could have done/should do:

CTMfile take:  Boeing should remember, “Late payments by large companies are a cancer, costing jobs & inhibiting recovery”. They are irresponsible and destructive.

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This item appears in the following sections:
Dynamic Discounting
Financing Short-Medium Term Deficits
Invoice Discounting & Securitization

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