Dear Valued Supplier – May I Use Your Creditworthiness to Make My EPS Target this Quarter?

On February 11th, oil service giant Halliburton recently sent a letter to its “valued suppliers” informing them that it had changed the company’s standard payment terms to net 60 days.  In effect, Halliburton values its suppliers so much that it is going to delay payment to them by 30 days from receipt of invoice.

What a great way to show how much they value their suppliers. Or maybe they are just saying “we’re big” so we can take advantage of you and you’re too small to fight us on this. And the small business supplier is now in the position of funding Halliburton’s operations for an additional 30 days. Meanwhile the small business must pay its bills on time and  incurs its expenses in advance of providing services to Halliburton, so that it is out-of-pocket for considerably longer than 60 days.

Apparently, Halliburton is joining the ranks of other big businesses in late paying small business as the following clip illustrates:

No wonder small business isn’t dashing to the rescue of the economy in hiring additional employees and ramping up for growth. Small business cash is tied up in the hands of the larger, more powerful companies.

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