Different organizations have different payment and credit policies. Some make early payment wherein they make the payments in advance. Others have the habit of delayed payment where they make the payment much later than the decided date, while some companies take credit period to make payments.
The one that is suggested and is considered the best till date is to make payment as per the terms decided in the contract. The payment on time policy should be followed for internal and external dealings. Be it staff salary or vendor payment, each payment should be made on time as decided. It is imperative to honor the contract that has been made either with staff or with the external agencies.
When we have a clear payment policy and follow it meticulously, it helps us gain trust of the people and agencies we deal with. Everyone will look forward to do business with us because they will know that we are fair in our financial dealings. Once the market considers someone as fair in their dealings then they will focus more on delivering quality rather than worrying about their payments. They know that they will be timely compensated for their quality work. It will also happen that people will extend credit but try as far as possible not to take unnecessary credits. It should be used only in dire circumstances where we do not have any other options. Once we build the reputation of good pay masters it will be upon us to maintain it and it will take only one bad credit deal with a wrong person to take it all down. So, credit should be avoided unless we are absolutely certain that the credit would be cleared within the stipulated time.
Similarly we should have clear policy about taking payments as well. Try not to extend credit where it is needless. We should have the same policy while taking payments as we have for making them. Payment should be made on time. Initially, some companies or people will have problems with this policy but it will also put us in league with the people whose principles are same as ours.