CORPORATE PURCHASING PAYMENT TERMS. History In 2003, AA preserved cash by extending payment terms...
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Transcript of CORPORATE PURCHASING PAYMENT TERMS. History In 2003, AA preserved cash by extending payment terms...
![Page 1: CORPORATE PURCHASING PAYMENT TERMS. History In 2003, AA preserved cash by extending payment terms by 15 days Today Disbursements continues to extend.](https://reader036.fdocuments.us/reader036/viewer/2022083009/5697c0281a28abf838cd6a14/html5/thumbnails/1.jpg)
CORPORATE PURCHASINGPAYMENT TERMS
![Page 2: CORPORATE PURCHASING PAYMENT TERMS. History In 2003, AA preserved cash by extending payment terms by 15 days Today Disbursements continues to extend.](https://reader036.fdocuments.us/reader036/viewer/2022083009/5697c0281a28abf838cd6a14/html5/thumbnails/2.jpg)
History
In 2003, AA preserved cash by extending payment terms by 15 days
Today Disbursements continues to extend all supplier payments by 15 days unless there is an approved exception
Purchasing must approve most exceptions
– Non-Purchase order suppliers must be controlled by the invoice approver
The goal is to extend all supplier terms by 15 days at contract renewal – optimal 45 days
![Page 3: CORPORATE PURCHASING PAYMENT TERMS. History In 2003, AA preserved cash by extending payment terms by 15 days Today Disbursements continues to extend.](https://reader036.fdocuments.us/reader036/viewer/2022083009/5697c0281a28abf838cd6a14/html5/thumbnails/3.jpg)
Reminders
Stick to the process
Notify JRM and MD of all requests to change payment terms
If a you can not convince a Supplier to maintain their current payment terms, do not negotiate with them. Escalate the issue.
Any change to payment terms MUST be approved by the Purchasing Manager, MD and JRM
Purchasing Finance must receive a signed payment change form to capture the financial impact
![Page 4: CORPORATE PURCHASING PAYMENT TERMS. History In 2003, AA preserved cash by extending payment terms by 15 days Today Disbursements continues to extend.](https://reader036.fdocuments.us/reader036/viewer/2022083009/5697c0281a28abf838cd6a14/html5/thumbnails/4.jpg)
If a supplier requests…...
Any change in Net days, even if they offer a discount– For example, requests to change from Net 30 to Net 20 or Net 10
or to change from Net 30 to 2% 10, Net 30 Prepayment C.O.D. Letter of credit Cash deposit Changes to frequency of invoicing Fed Ex or wire payments A trigger in a new or existing contract that will change terms Reduced payment terms during contract renewal or if a contract is
awarded to a new supplier that is offering different terms from the old supplier…..
It MUST go through the process and be approved
The Payment Term Change document is located - O:\SCM 2006\Process\Forms\Copy of Payment terms change form.xls
![Page 5: CORPORATE PURCHASING PAYMENT TERMS. History In 2003, AA preserved cash by extending payment terms by 15 days Today Disbursements continues to extend.](https://reader036.fdocuments.us/reader036/viewer/2022083009/5697c0281a28abf838cd6a14/html5/thumbnails/5.jpg)