Industry sector: Retail and wholesale

Fishing tackle retailer: 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 that you will make to your creditors (including VAT) in the months in which you will pay them. You'll probably be setting up accounts with:

  • specialist wholesalers
  • equipment manufacturers such as Fox, Daiwa, Shakespeare and so on
  • bait suppliers

Although some major distributors may be able to supply very many of the items you sell, you may find that you need to deal with quite a large number of suppliers to keep your shop fully stocked with popular lines. You can access a database of suppliers on the Angling Trades Association (ATA) website.

You might be able to join a buying group to benefit from better terms.

Setting up an account

For convenience - and to get the best terms of trade - 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

Some suppliers may also offer items such as free display stands, help with promotions and so on. These are likely to be related to the amount of business you put their way.

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