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Monday, 8 June 2009

ISO9001 Terms and Conditions of Payment

The current situation where banks and financial institutions are not lending to industry is causing serious damage to our economy. It has become clear that companies are delaying bill payment until the last possible moment and in turn this is causing cash flow shortages not seen even in the 80's recession.

The inevitable result is that organisations at the end of the purchase chain are being starved of cash and in some cases this cash-flow shortfall is putting viable companies out of business. I have noticed that some companies are unable to accept new orders because they do not have the cash to purchase raw material to service the orders.

The vast amount of cash advanced to the banking industry was designed to allow them to restart lending to industry; instead the banks used this cash to shore up their balance sheets instead of being made available to lend.

We are told that the borrowing by the Government will take up to twenty years to pay back. The pay-back time may be considerably longer if our mainstay industries are no longer there.

Companies that have ISO9001 in place are better placed to weather the downturn as they have a solid set of terms and conditions which include payment terms.
Remember those who shout loudest and have good control of their sales ledgers will the first to be paid; this may be the difference between survival and insolvency.

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