Industry sector: Leisure

Caravan site: 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. 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.

Your suppliers might include:

  • caravan and park home manufacturers and suppliers
  • caravan accessory manufacturers and distributors
  • utility companies
  • bottled gas suppliers
  • catering wholesalers and wine and spirit merchants if there's a food and drink side to the business such as a clubhouse, takeaway outlet or a site shop

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 will be able to negotiate a discount from the list price if you buy new caravans or park homes direct from the manufacturer. This might be in the region of 25% but will depend on the number you are planning to purchase. If you plan to run a site shop, bar or restaurant you may be offered, or be able to negotiate, various discounts from your suppliers. Examples include:

  • early settlement discounts
  • retrospective rebates
  • volume discounts

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