Industry sector:

Car valeter: Payments to creditors


When you buy supplies (consumables like valeting fluids and polish) on account instead of paying cash there and then, your suppliers are your creditors until you pay them. Enter in your cash flow forecast the payments that you will make to your creditors (including VAT) in the months in which you will pay them. You may be setting up accounts with motor factors and specialist suppliers of valeting materials, cleaning tools and equipment.

If your car valeting business is a franchise, you may be obliged to purchase a certain amount of your consumables - such as cleaning products - from your franchisor.

Setting up an account

For convenience - and to get the best terms of trade - it's usually preferable to set up accounts with your main suppliers. To do this you may be asked to provide bank and trade references. Until the account facility has been granted you will have to pay for your order at the time you place it. This is known as paying on a pro forma basis.

Once your account has been set up you will be invoiced at regular intervals and expected to pay within a certain number of days of receiving the invoice.

Discounts from suppliers

You may be offered, or be able to negotiate, various discounts from your suppliers. Examples include:

  • early settlement discounts
  • retrospective rebates
  • volume discounts

Some suppliers may offer you signs, advertising and promotional material in return for agreeing to use only their products.

In some cases suppliers may impose minimum order conditions and charge you for delivery.