The lines of credit see-saw discussed in earlier posts continues to make press, with The Times today reporting that “Big companies are delaying payment to smaller suppliers by more than 100 days in the biggest squeeze on small firms' cashflows since the early 1990s”. 

The Federation of Small Businesses (FSB) says that the situation has worsened dramatically in the past few weeks, with some members facing a wait of well over three months to be paid for goods or services provided.

A major new concern, however, is that big companies are starting to formalise longer payment periods, rather than merely settling their bills later in an ad hoc way Stephen Alambritis, the FSB's head of government affairs, said: “Many seem to be using the credit squeeze as an excuse to put in place permanent arrangements for long payment periods.

It’s a dangerous road. In our experience buyers that use collaborative procurement tools to strengthen rather than damage relationships are the ones who prosper best in both good times and bad.

In a recent piece of frenzied hype, online energy specialist supplierswitch.com has stoked business fears with a prediction that the average rate of increase in energy prices for corporate users could be between 60% and 100% year-on-year.

Whilst this might be a little alarmist, there’s no denying the impact of energy price rises on even the largest operators, with Tesco recently revealing that the financial gains provided by its 8 year programme of green energy initiatives have been wiped out by soaring gas and electricity prices.

And considering that energy and telecommunications costs can make up as much as 25 percent of an organisation's overall operating budget, it’s well worth paying close attention to utility costs. The good news – a commodity in somewhat short supply these days – is that energy remains one of the most responsive spend categories to effective sourcing.