Dell has earned its place in a late payment Hall of Shame after extending the
time it takes to pay its suppliers by 15 days.
cited ‘current economic conditions’ as the reason for the extension in a
letter to its suppliers.
However, the move appears to contradict Dell's latest results. Last week, Dell said it expects
solid growth over 2010. It predicts revenue will increase 14% to 19% this financial year with non-GAAP operating income increasing 18% to 23% in the same period.
of Private Business, which runs the late payment Hall of Shame, slammed Dell’s
decision to delay its suppliers' payments.
spokesman Phil McCabe said: ‘Small businesses continue to suffer from the
blight of late payment, which devastates cash flow and forces firms into
administration. Companies like Dell have a responsibility to pay promptly –
failure to do so can mean the whole supply chain seizes up.
receive a letter like this, smaller suppliers have no choice but to agree and
stay silent. There is little room for bargaining. For the sake of small
businesses and the economy the new Government must prioritise tackling the
culture of poor payment, addressing the bully boy behaviour of these bigger
supplier said: ‘As a ‘valued’ supplier of IT services to Dell I was dismayed to
receive this notice via email regarding a change to their payment terms.
the reason for the change is apparently due to the current harsh economic
climate. How is extending payment terms beyond the current draconian 50 days to
65 days going to help Dell’s legion of ‘valued’ SME suppliers, particularly
when most of our suppliers demand 30 days net?’