Often, we talk about ensuring proper due diligences on vendors to avoid any business disruptions. While reputation of vendors is very critical to the functioning of a business enterprise, there is also an emerging concern amongst vendors wrt payment delays from those very enterprises that conduct their comprehensive reputation risks assessment.
- In India, vendors catering to almost every sector have experienced delay in payments – when payments are delayed from the client company, it obviously has a trickle down effect right uptil at the beginning of the supply chain
- Payment cycles are usually longer in India, while some vendors do talk about interest for late payments, however this trend is still not widespread
- Sometimes, large companies have inefficient vendor management and invoice management systems that lead to payment risks for vendors
- Lack of centralized processes in companies also contribute to such issues
- Where government orders are concerned, a large percentage of billings are still done in the form of hard copies
- Or is it a social and a cultural thing to delay payments? This is something that one needs to analyse at a much deeper level
