From: David Thornton, Chairman,
The Window Company (Contracts)
Since the demise of Carillion, I’ve had several phone calls from colleagues in the industry asking if The Window Company (Contracts), as a specialist commercial installer, was exposed to any losses.
Thankfully I can say that we were not; and that is certainly more by judgement thank luck. Obviously, I feel nothing but sympathy for those sub-contractors who have suffered losses as a result of Carillion’s collapse, and especially those whose businesses are now at risk. However, having been in this market for many years, I can say that their reported payment terms of 120+ days would have rung sufficient alarm bells for us not to work with them.
In my experience, customers generally only extend payment terms when they are struggling to pay and, as a supplier, that is the point when you need to have the confidence to walk away if you can’t trade under those terms, or if they don’t suit your business model.
If you believe in the quality of your product and service, then you must set your own reasonable payment terms and, most importantly of all, stick to them. In our experience, customers who want to work with you, and who are worth working with, will accept those terms if they truly understand that they are non-negotiable but fair.
For us, paying on time is a question of commercial morality – no supplier, regardless of how big or small they are, should be expected to act as an unofficial bank for their customer. We treat all our suppliers in the way that we would expect to be treated – and, in this industry, I don’t think that’s a bad maxim to work to.
www.thewinco.co.uk
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