“Big companies ‘have the power over small vendors. At this point we have kind of swallowed and accepted that indignity,’ he says, adding that ‘we’ve had more trouble managing our cash flow this year than in any year in the history of the company.”” Hero Arts Inc., Chief Executive Aaron Leventhal.

Acting as a bank, when the banks won’t, is dangerous to your bottom line. Big companies know that they are walking on thin ice. If you go under, they lose a valuable—and viable—supplier. Here are some startling statistics:

Companies over 5B gross revenue

• Collect payments in 41 days, as apposed to 41.9 days last year.
• Pay bills in 55.8 days, as opposed to 53.2 last year.

Companies less than 500M gross revenue

• Collect payments in 58.9 days, as opposed to 54.4 last year.
• Pay bills in 40.1 days, as opposed to 42.9.

Rather than giving in get creative. Look at the entire agreement—everything from forecasting, to delivery, to quantity—for areas that can be re-negotiated in your favor. Some clients in the past had problems purchasing raw materials and managing labor because big companies could not accurately forecast. For these clients, I suggest that in exchange for acting as a bank, look at tightening up, or changing, the forecasting so that whatever you are losing you can gain back somewhere else.
Your company’s bottom line depends on your ability to negotiate. My next webinar, Negotiating with the Big Dogs, covers this issue, and many others.

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