Find the new article by Ydriss ZIANE, Senior Lecturer HDR at the Sorbonne Business School.
It's a well-known adage among businesses of all sizes. For the end consumer, there's no debate: with the exception of a few credit sales, you have to pay for your purchases as soon as you go through the checkout, in cash, to leave with them, or risk being prosecuted for skimming. In the vast majority of cases, payment terms do not exist. In the business-to-business world, things are different and more complex. Intercompany credit is a long-standing and common practice involving indispensable and recurring transactions between customers and suppliers.
Two forms of inter-company credit may coexist: on the one hand, the advance or down payment received by the seller and paid by the buyer before delivery to secure his order and ensure its proper execution. On the other hand, supplier credit, when payment is made later rather than at the time of delivery, creates a receivable for the seller from the customer and a debt for the buyer to the supplier. We speak of "current" assets and liabilities. [...]