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Are you having problems with a vendor who demands you pay faster than you are currently issuing checks? You want to pay him in 60 days and he wants net15 days. He either threatens you or puts you on hold. One option you might have if appropriate is to request that he buy goods and services from you. If he buys what you sell or offer, this may help him out. Try and offer this idea to him.
If you can reach an agreement with him to sell to him, you may be able to convince him to offset accounts payable and accounts receivable invoices. This will involve minimal cash and he most likely can get paid faster on some of his invoices depending who is doing more sales with the other party.
Tell him to consider this. He gets paid for his accounts receivable invoices as soon as he can bill your firm and present the invoices to you. You get paid quickly. All of this involves nominal cash. Minimal cash can be exchanged between the two companies while paying off AP and AR, except for a nominal amount to generate a check to provoke the action.
Banks, which own rights to AR invoices under line of credit agreements, do not like this so you will have to eliminate these offsets each month in your reporting to the bank. The ability though, to get invoices paid immediately by a customer while offsetting accounts payable invoices, may be approved if coordinated with the appropriate lenders ahead of time. They also realize this relationship helps to keep one from holding shipments to the other.
