Does it Make Sense to Pay Vendors Early?

According to Gene Marks, CPA and president and CEO of the Marks Group, it does make sense to pay your vendors early. Your vendors are critical partners, and if you treat them this way you will see the payoff in the long run.

One advantage of early payment is discounts many vendors offer for early payment. If you don’t see an early payment discount option on an invoice, don’t hesitate to ask your vendor what they can do for you.

Paying vendors early also helps solidify relationships. You will be someone your vendors want to continue to work with. They will be willing to take your calls, and are more likely to do favors should need something like last minute inventory fast.

Marks also suggests paying vendors twice a month – say on the 10th and the 25th. He says this allows you to avoid seepage of money from an uncontrolled environment, and knowing your cash requirements will make a difference in how you are able to handle your cash.