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How is a supplier concerned about company financial position?


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Wiki User
September 03, 2008 2:20PM

Suppliers are very concerned about a company's financial position, because most sales to companies are done on a 30 day payment plan. The suppplier delivers the supplies and waits up to 30 days for payment. If the company is close to bankruptcy and the supplier ships supplies to that company, it is likely that the supplier will not be paid. If the supplies are used up, it can't take tham back, so te supplier will most likely take a loss on the bill. Many times, if suppliers suspect an imminent bankruptcy, they will deliver supplies only if paid for in cash on delivery.