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> value added tax Bit of an oxymoron, but point well taken. There exists a legit and conditionally significant operational risk to not being paid in a timely
by metaphor 8y ago
> value added tax
Bit of an oxymoron, but point well taken.
There exists a legit and conditionally significant operational risk to not being paid in a timely manner. Waiting 30+ calendar days is commonplace in private business-to-business transactions...problem enough that US Federal law explicitly requires government agencies to include interest[1] on contractor payments made after 30 calendar days of proper invoice. Furthermore, if clearing time measured in days wasn't enough, the bank may even place a hold on a appreciable percentage for weeks without prior notice, and there's nothing you can do but wait it out; anecdotally, it's happened to me on at least one recent occasion with a large check issued by the Department of Treasury.
[1] https://www.fiscal.treasury.gov/fsservices/gov/pmt/promptPayment/rates.htm https://www.fiscal.treasury.gov/fsservices/gov/pmt/promptPay...
- pjc50 8y agoLate payment of invoices is a real problem for small businesses, yes. But the real distinction is upfront/arrears, not how it's settled! Someone can fail to pay an invoice in cash just as well as they can fail to pay it by cheque. (I do think governments should try to heavily discourage long arrears and move to e.g. 7 days being the norm; invoices are a form of unsecured credit that can cause ripple collapses like any other form of credit.)