Thermal spray accounts payables

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Thermal spray companies everywhere are being subjected to the same levels of credit pressures that every industry is facing in the world today with the woes of the global credit crunch. With banks not willing to lend money easily, thermal spray companies are faced with increasing pressure to manage their cash flow positions in order to survive, let alone to prosper. This is going to result, I am afraid to say, in a large number of weak thermal spray businesses simply go bankrupt. Of course this means lesser of a competition for those thermal spray shops that are able to survive this economic tsunami that is raging throughout the world. Well, how to ensure that your thermal spray company will not become a statistic in this global economic downturn is the main purpose of this post. Particularly, how do you handle your thermal spray accounts payables in order to survive well is the topic of discussion.

When we talk about thermal spray accounts payables, we are not talking about paying for thermal spray coatings services as would be the case if you are a user of thermal spray coatings. Rather, we are talking about you being a thermal spray vendor who performs these coatings services for end users of thermal spray coatings. And we are going to maintain high business ethics in achieving this goal – something that seems to have been forgotten by the stock market experts everywhere in the world. In my opinion, Wall Street is not the only culprit, rather stock exchanges worldwide have participated in the greed and unethical practices that has led us to where we are today.

In accomplishing the goal of meeting thermal spray accounts payables consistently, I would strongly advice against putting off payables to as long a period as possible. This is the route that short term focused accountants advise. That is, in my opinion, playing cat and mouse games. There is no way your thermal spray business is going to succeed if you believe in squeezing your suppliers and letting them sweat for the last penny YOU owe them. In actual practice, and believe me, this is being practiced by some small but very healthy thermal spray companies, wherein you pre-plan the amount of thermal spray purchases you and your people can make based upon a budget for the upcoming purchase period. In other words, you develop a budget even for the purchase of consumables such as thermal spray powder or gun components and such based upon the amount of cash that is already set aside in an account that will be used up to pay when the bills arrive.

This may sound like operating the business in an extremely conservative fashion, but it is those high values of fiscal responsibility that allows companies to weather rough economic storms as we are facing today. This by the way is a technique that has existed several decades ago in the U.S., and that is the reason why companies had a policy of getting an accounting signature when ordering materials through purchase requisitions. This allowed a control on spending to prevent spending more than what the budgeted amount for purchases was. Unfortunately that ended up being another chore that managers went through and getting signatures became a regular matter of course rather than a serious consideration of the cash available for making accounts payables on time.