Sunday, September 11, 2016

Delay in receiving payments can kill a small business

Someone told me.

I run a business selling specialised equipment to government agencies. I have to submit a competitive tender to win the award. The equipment can cost a few hundred thousand dollars. The government agencies can take a few months to pay me.

I have to chase them. Their excuse is that a payment above $50,000 requires the signature of the director. The director is now overseas.

As my cash flow is tight and I am paying high finance charges, the delay can kill my business. I face this problem with large companies, but government agencies are the worst. I also have to waste my time chasing for payment.

Many other small businesses supplying products and services to government agencies face the same problem. They have to pay their supplier, pay GST and pay their employees upfront and wait a few months to get payment from the buyers"

I agree with him. It is a bad practice for the large companies and government agencies to take advantage of small business in this way.


Yujuan said...

Govt Agencies and GLCs operate on a SME mentality, including dragging payments. Now you know why they can't survive being thrown into the international arena to compete, only thrive on home ground monopolistic advantage. Such businesses an idiot also can make "big".
MNCs will pay up more quickly when given reminders, as being bigger, tend to overlook smaller bill requests. Just dun forget to send mooncake and bak kwa gifts during festive periods.
Believe many smaller entrepreneurs, easier to do business and get paid with MNCs, than with Govt related enterprises.

Anonymous said...

A lot of government agencies are like that - full of reasons for delaying the payments. Believe me...... they are not going to change for the better in the next 10 to 20 years. Hence, deal with it.

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