As a director or senior manager, you are best placed to foster a culture of prompt payment within your organisation. These are the actions you can take. 

DO

• Have a top management policy on prompt payment of bills. Ensure that the finance and purchasing departments are all aware of it. 

• Agree terms of payment at the outset. 

• Monitor your payment system regularly 

• To make sure that it processes invoices in time to meet due dates. 

• Instruct that all undisputed bills are paid on due dates. 

• Have a good system for clearing disputes quickly. 

• Foster good relationships with suppliers. 

• Help your suppliers to understand your payment procedures and, if possible, issue guidance literature. 

• Tell suppliers the name of the person responsible for payments. 

• If you have a computerised payment system, make sure it can be overridden if necessary to comply with agreed terms. 

• Promote healthy cash flow in both directions by having efficient collection for your own sales. 

DO NOT Reduce your bank borrowing with unauthorised free credit taken from suppliers.

DO NOT Use the financial strength of your organisation to impose abnormally extended terms of payment.

DO NOT Rate suppliers for payment in an order which reflects their bargaining power.

DO NOT Use a minor invoice error as an excuse to delay payment when you have had the benefit of a good product or service.

DO NOT Restrict the financing options of your suppliers by including such restrictive clauses as 'ban on assignment'.

DO NOT Condone a hostile payments relationship which does not match the friendly purchasing one.