Cash Flows and Consequences: Businesses With Clout Slow Their Payments

 

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In the summer of 2015, APQC launched a survey to examine the growing financial pressure on suppliers resulting from customers forcing longer payment terms, which is tracked by finance managers with the metric known as days payable outstanding (DPO). Believed to be a remnant of the 2008-2010 financial crisis, the survey findings pointed to a transition in organizational policy. A growing number of large companies are taking longer to pay their suppliers because they want to polish their working capital profiles, not because they are experiencing cash flow pressure.

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