Friday, May 7, 2010

Sant Cugat pays the bills on time

Sant Cugat made the Financial Times on a story about how the municipality has kept itself out of financial trouble (Thanks Jeremy!).

One revolutionary idea was to pay suppliers within 30 days. Local governments in Spain tend to regard accounts payable as a sort of free loan that they can use to stretch out finances as long as possible. Of course, nothing being free, suppliers just end up needing to charge more, or go under without the money to pay their own bills.

Since the suppliers tend to be local businesses, towns end up only sabotaging themselves.

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