If when I purchase something I pay for it immediately why do companies/government/orgs after approving a transaction and/or receiving the work take 1-2months to pay for it?
EDIT: I am a new agency owner, so trying to figure out cash flow
EDIT 2: thank you guys so much for the detailed answers! Really helped me further narrow down the kinds of customers I do and don’t want to work with moving forward.
In: 2
A number of factors will one into play, but I will only provide one example.
Most of these companies may not get paid for selling the goods until the goods are installed, sold, or consumed. They setup agreements with suppliers to have some time to get their payments from customers and it is typically a mutually beneficial relationship.
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