When President Obama announced the SupplierPay initiative in July, the news was met with little fanfare. The White House put out a statement—which media outlets largely repurposed without taking a closer look at the potential impact of the pledge. The news cycle soldiered on.
It’s understandable: “supply chain” and “invoices” aren’t the sexiest of topics. And while it’d be easy to dismiss the initiative, which encourages large corporations to pay their small business suppliers earlier, as a trivial public relations move—it’d also be wrong.
The idea of paying suppliers faster is actually not a new one. In 1999, the U.S. Government enacted the “Prompt Payment” rule, mandating that the Executive branch of government pay its suppliers within a certain period of time. In 2011, Obama launched the Quick Pay initiative, which, “requires federal agencies to speed up payments to small business contractors, with the goal of paying within 15 days,” according to the White House. This was another step in the right direction, but it didn’t do much for businesses that don’t sell to the government.
Then came SupplierPay this month, which is modeled after Quick Pay. President Obama met behind closed doors on Friday with executives from some of America’s largest corporations, including Apple, Toyota, and CocaCola, to encourage them to pay suppliers earlier.
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