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Originally Posted by simon drabble
its all to do with counterparty risk - if your c/p has a strong stand alone financial standing then you can take an informed credit stance on the lateness of the payments, however if the financials are less clear than you are forced to take a more defensive stance. Vague spurious connections to Dubai is possibly a little to tenious a counterparty risk for some suppliers to provide extended credit.
I would have thought a more intelligent stance would be to show rapid payment in the early stages in the absence of a strong balance sheet and that way whilst reputation is being established they are fewer critics...
just a thought as I am an investment banker rather than in the industry!
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Agreed wholly, although I would point out that in the Middle East they do seem to prefer the "don't you know how I am" approach to being asked about financial standing rather than actually stumping up evidence or indeed cash. So your approach is obviously the right one to follow, I can honestly say I'm not suprised they did it this way.