June 7, 2010 
This entry was posted on Monday, June 7th, 2010 at 8:30 pm and is filed under Accounting, Accounts Payable, Tips. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.
In business there is a mutual agreement between the business and the vendor that credit will be given for product. This is not only the benefit of the vendor but also the business providing the credit. Businesses are willing to have account payable payment terms in order to get the business.
Usually there is negotiation about the accounts payable payment terms. The business relationship becomes strong over time with the accounts payable payment terms becoming for relaxed. An example would be that if payment is due on the 30th day but a friendly phone call by the buyer can make it a week longer. It is also wise to take payment discounts wherein suppliers offer certain reduction on price if you pay within their specified period of time, say 10 days. This will bring back a portion to your working capital.