According to an article on Publisher’s Weekly’s website, the once-powerful Borders bookselling chain has suspended payments to suppliers due to cash flow problems. Of course, its major suppliers have cut off shipments until they are paid.

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The result? A nearly 20% one day drop in Border’s stock price.

Ouch.

Now, Borders might be in dire financial straits. But many organizations are less than diligent with supplier payments even when they are healthy.

Because this matter with Borders makes it clear that ability – or even perceived ability – to pay suppliers can be a powerful indicator of financial health, you should be able to understand how a procurement department can positively or negatively impact stock price by its supplier payment policies and practices. Pay those suppliers in accordance with your agreements and support a high stock price for your organization!

Why is stock price important?

Well, a significant percentage of most publicly-held company’s senior management’s net worth is dependent on stock price. You wouldn’t want your CEO upset with you because late supplier payments wiped out 20% of her net worth would you?

To Your Career,
Charles Dominick, SPSM, SPSM2
President & Chief Procurement Officer
Next Level Purchasing, Inc.
Struggling To Have A Rewarding Purchasing Career?
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Next Level Purchasing . com

Charles Dominick, SPSM, SPSM2, SPSM3

Charles Dominick, SPSM, SPSM2, SPSM3 is an internationally-recognized business expert, legendary procurement thought leader, award-winning entrepreneur, and provocative blogger. Charles founded the Next Level Purchasing Association in 2000, oversaw its incredible growth, and successfully led the organization to its acquisition by the Certitrek Group in 2016. He continues to blog and provide advisory services for the NLPA on a part-time basis as he incubates his upcoming business innovations. Charles is also the co-author of the wildly popular, groundbreaking book, "The Procurement Game Plan: Winning Strategies & Techniques For Supply Management Professionals."

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