When you buy supplies 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 look to set up accounts with suppliers of specialist osteopathic/rehabilitation and general medical equipment.
Setting up an account
For convenience it is best 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
Retail sales of equipment
You may decide to offer certain items of equipment for sale to your patients, such as joint supports, pain relieving gels and so on. You may decide to keep a small stock of such items or you may decide to order them when patients order from you. The latter method will mean that you don't have money tied up in stock and, as many suppliers offer 24 hour delivery, should mean that the patient is not unduly inconvenienced.