Final Word from Thursday, April 21, 2011

The Czech finance ministry expects robust GDP growth this year of 2.2%, but small companies are dying left and right because they can't get paid on time by their customers. The International Business Forum found that this is the top challenge facing its small and midsize members. And it's the multinationals, with their "nearly impossible" payments terms, that are the biggest problem, the IBF said. Instead of tapping their bank credit lines, major global companies are increasingly using forced supplier financing to fund themselves. What's four or six months here or there, right? If it's legal and makes money for shareholders, as The Economist suggested in Jan., a company should do it, because morality is the realm of governments and individuals, not companies. The IBF disagrees and plans to launch a "prompt payment policy." It's a foregone conclusion that not many multinationals will sign up for the voluntary program, undoubtedly because they would "love to," but their global corporate policy forbids it.

Glossary of difficult words

robust - strong and healthy; vigorous;

left and right - on all sides;

to tap - to exploit or draw a supply from a resource;

realm - a field or domain of activity or interest;

foregone conclusion - a result that can be predicted with certainty.


Tel: 420 224 221 580

Published by

E.S. Best s.r.o.
Ovenecká 78/33
170 00 Prague 7
Czech Republic



FS Final Word