Good morning Ron,
With our biggest suppliers we set up job accounts, which gives them the opportunity to post notice of right to lien on those projects. Those notices help to protect their interests. With that we've been able to negotiate 60 day terms as well as the ability to pay with credit card when the invoices come due. This allows our cashflow on these larger jobs to match up with the payments from the owners to the GC's to us, which is as you say, 60 to 90 days out. Even if you can't get them to agree to the extended terms, if you can get them to take credit card as a form of payment, that effectively gets you 60 days so you're not funding these projects quite as long as if you're paying bills at 30 days and not seeing the cash for another two months.
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Matthew Hill
CFO
Vannoy Electric, LLC
Wasilla AK
(907) 357-3383
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Original Message:
Sent: 04-14-2020 18:49
From: Ron Heemstra
Subject: Supplier Terms
Over the years, we've seen our clients push for longer payment terms on contracts. Some are now 60 or 90 days and a few even longer. We have not pushed our suppliers into longer terms as most are net 30. Wondering if other companies are pushing for longer terms with their suppliers and what you've run into with that.
Thanks for your responses!
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Ron Heemstra
Controller
Interstates
Sioux Center IA
(712) 722-1662
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