Industry sector: Retail and wholesale

Milk round: 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. For maximum convenience - and to get the best terms of trade - you will probably aim to set up an account with each of your major suppliers, which might include:

  • a dairy for supplies of milk and related products
  • grocery wholesalers
  • local bakers and other retailers

Setting up an account

To set up an account you may be asked to provide bank and trade references and 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 each invoice. Major dairies generally offer weekly terms for supplies of milk. Other suppliers may allow you 30 days.


If you are going to operate as a franchisee you will probably have to buy all your stock from the franchising dairy who will expect you to pay for your supplies weekly.