What techniques exist to lengthen average days outstanding for payments to vendors/suppliers?

By negotiating best possible terms with major suppliers, you can reduce your cash burden. If you can negotiate 'net 60' rather than 'net 30' terms on your payments to suppliers of your raw materials, you can increase your company's cash on hand by 4% (assuming that your cost of raw materials represent half of your revenues). Try purchasing in larger quantities. Try negotiating with multiple vendors. Try local, national, and overseas sources.

Related Question:

How do I change how long my vendors/suppliers will wait for payments?


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