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Is it ethical for large firms to extend their payables period to small suppliers and not to large suppliers?

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Is it ethical for large firms to extend their payables period to small suppliers and not to large suppliers?

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  1. Your question is interesting.  You use the word "ethical".  That word has a different meaning than "legal".

    You could make out a case that every firm, large or small, ought to honor its contractual commitments.  To me, that would mean paying their payables within the time period they agreed to.  If the invoice calls for a 10-day payment, they ought to pay within 10 days.  If the invoice calls for a 60-day payment, they ought to pay within 60 days.  Corporations that honor their commitments (even if the commitments have varying due dates) are, in my opinion, acting "ethically" and legally.

    Is it illegal for a large firm to pay a small supplier differently than it pays a large supplier?  Probably not.  Admittedly, it may be violative of their contractual agreement, but breaking a contract is not usually a crime.  The problem is that a small supplier doesn't have the clout to insist upon timely payment and doesn't suffer enough actual damage from late payment to make it worthwhile to sue the large firm.  And, of course, were a small supplier to sue the large firm, it'd get no further business from the large firm.  Kind of a catch-22.

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