How often do companies typically produce payments: daily, weekly, semi-monthly, etc.? Is it common practice for companies to pay outside of contracted payment terms?

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See Check Runs frequency in TAPN’s Benchmarks: Disbursements survey. The frequency of payment shows some correlation to size of organization; smaller organizations are more likely to have weekly pay runs vs. larger organizations, but 29% of organizations with 10,000 or more employees run checks weekly rather than daily or twice a week.

As for paying outside of terms, since the economic downturn more than six years ago, many organizations began stretching payments and/or negotiating longer terms.  While simply stretching payments is often seen as a way to solve a cash flow crunch, doing so unilaterally can damage vendor relations. Best practice is to discuss adjusting terms with vendors; trust is a foundation of good relations. Most vendors do not want to lose a customer and will work with you to accommodate a change. Of course, as was also noted before, leverage in a relationship also bears on what a party can get away with.

While in a grey ethical zone, there are those that recommend observing vendor behavior to determine at what point the vendor starts calling, and setting your payments accordingly—this may gain a few days, but not a significant change in vendor payment timing.

The above, of course, assumes you have sufficiently efficient AP processes to be able to pay on time! Some organizations still pay a fair percentage of their vendors late due to their inability to turn invoices around quickly enough.

You may wish to post your question to The AP Network’s Forum to solicit input from other members.

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