[JonWood]

Having worked as a solo freelancer in the UK my experience was that prompt payment is inversely proportional to the size of the company.

The single man startups I worked for would pay their invoices promptly, while multi-nationals seemed to consider "net 30" to mean they shouldn't even consider paying until 30 days after receipt, and seemed to have a policy that they wouldn't pay until hassled.

[tptacek]

We pay pretty much instantaneously too. There's a couple reasons why we're "good" at paying and F500s are "bad" at it (although in MBA terms, we're the ones who suck):

* We don't have a payments/procurements department, so "payment" usually means me, Dave, or our finance person just cutting a check.

* We derive no meaningful benefit from withholding payment (pennies of interest, versus hundreds of dollars of lost cycles).

At giant companies, carefully managing payables probably makes an enormous difference. When you say "operations excellence", stuff like how vendors are paid is one of the first things many people think of.

[christoph]

Tell me about it... sometimes I'm lucky to even have a PO (purchase order) number to put on the invoice, 30 days after I've completed the work with large companies.

The payments department won't even look at the invoice if it's missing that.

[cbsmith]

Rule number #1 in contracting: factor in the interest costs for N days interest in to your price. Your contracts should factor in an exorbitant penalty (based on time-value of money for YOU, not the market place) for post "net N" days (I'm a big fan of 10% + 1% per additional day). Great video on this:

http://vimeo.com/22053820