Industry sector: Consumer services

Tanning centre: Payments to creditors

When you buy supplies on account instead of paying cash there and then, your suppliers are your creditors until you pay them. 'Payments to creditors' are the payments you will make to your major suppliers of tubes and stock - tan accelerators, aftersun creams and so on. Enter in your cash flow forecast the payments you will make to your creditors (including VAT) in the months in which you will pay them. For maximum convenience - and to get the best terms of trade - you will probably aim to set up an account with each of these main suppliers, which might include:

  • sunbed manufacturers and distributors
  • specialist wholesalers of tanning and beauty products and so on (depending on the range of retail items you will sell)
  • suppliers of consumables such as cotton wool, cleaning solution for protective goggles, disinfectant wipes, cleaning materials, couch roll and so on

If your tanning centre is part of a franchise, you may be obliged to purchase a certain amount of stock from your franchisor.

Setting up an account

To set up an account you may be asked to provide bank and trade references and until the facility has been granted you will have to pay for your order at the time you place it. This is known as 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. Many suppliers will allow you around 30 days to pay. Some will offer you a discount of, say, 5% for prompt payment.

After sales support

Many of the specialist suppliers to the tanning sector offer a comprehensive range of goods and services. From one of these you might be able to obtain:

  • sunbeds and vertical tanning units (VTUs)
  • replacement tubes and parts
  • pre and aftersun creams and lotions
  • consumables such as cotton wool, tissues, disposable gloves and goggles
  • free helpline
  • servicing, maintenance and repairs
  • training
  • leasing facilities/interest free credit/profit share schemes

They might also be authorised as a waste carrier for the disposal of your spent sunbed lamps.