Network integrators resent 14-day credit policy

Major distributors who have brought in the 14-day credit policy in Delhi and

Mumbai, want to implement the same in the South. Association of Information

Technology (AIT) had organized an in-depth discussion on the subject recently.

However, several network integrators (NIs) and resellers have resented the

14-day credit policy.

C Dhananjay, MD, Computer Factory, points out that in network integration,

customers impose strict deadlines with tough penalty clauses based on which NIs

procure material. "Payments are not made till the time the project is

completed and documentation is finalized. This sometimes takes as long as three

months," observes Dhananjay.

The same opinion was echoed by another reseller who wished to remain

anonymous. According to him, in a typical corporate environment, the purchase

order is issued after presenting the required quotations. He also added that

this kind of arrangement sometimes takes over 15 days time for the proposal to

get matured and another week to receive the first payment. Also the payment

structure that some of the reputed companies follow today is that of 50 percent

payment on delivery, 30 percent after installation and 20 percent after six

months.

Under pressure from distributors for immediate settlement of payments,

resellers tend to issue cheques in order to procure the material. The cheques

sometimes bounce because the NIs do not get payment from clients. But

distributors do not understand this and block supplies.

This sometimes drives NIs and resellers to look for another distributor for

material and the vicious cycle continues. Hence, NIs want the distributors to be

sympathetic to their case and not limit the credit period to just 14 days.

SUNILA PAUL