Use a business credit card or negotiate with suppliers?

A credit card for payment to suppliers is a tool that helps you a lot, but you should know how to control.
Negotiating better payment terms with suppliers is something a good administrator should do but always with the circumstances in favor. Having a commercial credit is useful from any source.

Bank executives should know what the best conditions are for the client and thus offer true solutions. Institutional credit requires prior procedures such as account statements, financial analysis and personal documents, but once authorized, it can be activated at any time.

 

What requirements must you meet? To a bank or provider you must share:

credit cards

  • How long have you been in business?
  • Personal and commercial references
  • Financial history
  • Tax return

This information will be used to contrast it with third parties and thus have a deeper reading of your ability to pay. Regardless of whether or not you use this line of credit, you will generate a history that will be useful for other deals.

The reading is done on average once a year to have an updated and fresh overview of the credit behavior of your firm.

 

Taking into account the protection of your data you could give up requesting a credit in circumstances such as:

Taking into account the protection of your data you could give up requesting a credit in circumstances such as:

New supplier. If you do not have a clear, solid and trustful relationship with your provider, take care of the information that you will share with it. First you must prove their reliability and that of their products.

Small purchases It is not necessary to manage strong relationships with all vendors. That can complicate the administration and generate an investment that is not worth it.

Occasional sellers If you only buy that seller once a year, it is not worth generating a credit relationship, since it is not convenient for any of the parties.

We want to get a credit relationship that comes in good terms to pay less interest and to buy more and better. Some suppliers require a certain number of years to offer a payment term to their customers and they do the same in a reciprocal way.

As in personal relationships, reasonable time must pass before making commitments in the process of how to pay suppliers to build trust between the parties. Otherwise, the land on which this climate is built will be unstable and in the short term.