Small business commissioner to tackle late payments
Small business commissioner to target late payments

An interesting point to consider for any exam, in that regulation imposed by the UK Government within the Enterprise Bill to create the Small Business Commissioner to tackle the estimated £26bn of late payments. 

Supermarkets are renowned for using their strong purchasing power to drive down prices, milk being one of those regularly on the headlines and also force suppliers into extending payment terms. 

Working capital cycles calculated by comparing receivables days, inventory days and payables days. Supermarkets based on their high inventory turnover, lack of receivables days and extended payables days, have negative working capital cycles. Such large cash surpluses are then used to fund expansion, acquisitions and further investment into technology and infrastructure. 

Consider how this could impact on Merchants, consider the impact on their working capital cycle, cash flow and possible reputational damage for failing to settle payments with suppliers in a fair and just manner.