If you are a buyer or purchasing manager for business, which of the following ways do you buy MRO items (maintenance, repair, and operating supplies)?

Buy only when immediately needed.
Buy expected amount needed for a month or two.
Buy amount depending on cost and price breaks.
Allow suppliers to estimate our needs and buy and store that amount.
Have supplier store amount for us that we use in a reasonable time.
Store amount by item category depending on cost and usage.

Is Your Company Paying On-Time?

Date: 08/24/2017

Do you ever have a supplier tell you that your company is paying its bills late? Most suppliers will not tell the buyer unless the situation is flagrant, but late payments still reflect poorly on the buyer as well as the company. Your organization should honor the payment terms that are agreed upon. Check by asking your suppliers if they are getting paid on-time and ask your accounts payable people as well. If paying on-time is a problem, perhaps you should negotiate a longer time for payment. What do you think? Please give us you comments or suggestions.

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Kelly - Dec 06 2017 12:00 AM

Unfortunately, no matter the payment term length some large companies will deliberately stretch payment out to keep the money in the bank longer. As buyers, we must find a way to smooth the flagrant situations over here and there. Quarter end and year end seem to be the worst times for not honoring payment terms. We are regularly pushed to negotiate discounted payment terms but rarely does AP get to take the discount because of corporate freezes on payments.