Re:Ask HN: How do your enterprise customers pay you?
by andrewem on Thursday February 19, 2015 @07:30PM
(#9078178)
A relative of mine has a business which sells to very large companies. One of them pays so much later than even the normally egregious large companies that they get a "special" price, which takes into account the cost of not getting paid for say 120 days. (This company is large enough that it's one of the 30 companies in the Dow Jones Industrial Average [0]).
Related, how many days you have to wait to get paid after you've spent money supplying the thing is called the cash conversion cycle. For a business selling to enterprises, maybe it's 90 days from doing work or building a widget and shipping it until they get paid. Dell back in the day would charge your credit card as soon as you bought a computer, and then only pay its supplier some time later, so that they had a negative number of days, I think around -5; in effect, their suppliers were loaning them money.
Related, how many days you have to wait to get paid after you've spent money supplying the thing is called the cash conversion cycle. For a business selling to enterprises, maybe it's 90 days from doing work or building a widget and shipping it until they get paid. Dell back in the day would charge your credit card as soon as you bought a computer, and then only pay its supplier some time later, so that they had a negative number of days, I think around -5; in effect, their suppliers were loaning them money.
[0] http://en.wikipedia.org/wiki/Dow_Jones_Industrial_Average [1] http://ycharts.com/glossary/terms/cash_conversion_cycle