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. For maximum convenience you will probably aim to set up an account with each of your major suppliers, which might include:
- national and regional brewers
- wine and spirits merchants
- independent wholesalers to the licensed trade
- catering suppliers
- gaming machine suppliers
Setting up an account
To set up an account 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
UKHospitality represents the interests of retailers and suppliers in the licensed trade. Visit the UKHospitality website to see a list of supplier members. Similarly, the Gambling Commission website includes a searchable database of gaming machine operating licence holders. (An operating licence is required by anyone who wants to manufacture, supply, install, maintain or adapt gaming machines.) Rather than buy or rent machines yourself, you might decide to take advantage of a profit sharing initiative. A number of machine suppliers now offer this and it can be a good model if you want to take the financial risk out of having gaming machines on your premises, although you will of course have to give the supplier their cut of the takings - usually 50%.