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It’s Only Common Sense: When Will Big Companies Start Paying Their Bills on Time?

Let’s address a truth that PCB and PCBA providers across America know all too well and it’s about time that someone talks about this: There’s an alarming and frankly disturbing trend with our customers—especially the larger ones—of not paying their bills on time. For the industry’s small- and medium-sized shops, the impact of these delayed payments isn’t just an inconvenience; it’s creating a severe, often crippling cash flow issue.

When a billion-dollar company decides they’re going to take three, four, or even six months to pay a $5 million supplier, it’s not because they can’t pay on time. It’s because they choose not to, and that can devastate the smaller companies supplying their products. This isn’t a “take it or leave it” scenario for those smaller shops. Refusing these terms often means risking their biggest accounts.

These delayed payment terms are a form of bullying—pure and simple. Big corporations are taking advantage of their suppliers, using their purchasing power to impose terms that would be impossible if the relationship were truly equal. They set these terms because they know the smaller companies need the business and don’t have the leverage to push back without significant risk.

When a massive enterprise comes back to a PCB supplier and announces, “Oh, by the way, we’re changing our terms. Now we’ll pay you in 120 days, or maybe 180,” it’s not a negotiation. It’s a mandate. For the supplier, the choices are bleak: Accept the new terms or lose a huge account. The message is clear: comply, or we’ll find someone else. That’s not fair, and it’s not ethical.

In an industry built on tight deadlines, flawless execution, and just-in-time deliveries, PCB and PCBA providers often have to work miracles to keep production lines moving. They work tirelessly to meet demands, knowing that even a slight delay could disrupt production schedules down the line. Yet, when it’s time for those big companies to hold up their end of the bargain, suddenly the urgency vanishes.

Imagine what it’s like for these smaller companies. They have bills to pay: salaries, raw materials, and equipment costs, not to mention the inevitable repairs and maintenance of complex machines. Let’s not overlook the contract manufacturers who have to buy everything they need in advance and then wait up to six months to be paid. Really? Their suppliers are not waiting for them to pay. They want their money now or they will stop providing components and other parts for the PCBA shops’ next project. This means that with each extended payment term, they’re effectively functioning as an interest-free bank for a massive corporation. It’s unfair, financially draining, and unsustainable.

What kind of industry are we building when these practices become normalized? If we want to protect the American PCB and PCBA industry, we need to hold everyone accountable for fair practices. This is about respecting the integrity of the industry and the companies that have built it. After all, these smaller suppliers are the backbone of the supply chain, ensuring that even the largest corporations can operate without interruption.

We hear more and more stories about our customers, especially the larger ones, complaining to the U.S. government that they need to be allowed to go offshore for their specialized ITAR needs—that the current domestic PCB and PCBA vendors can no longer support their needs while all the time they are draining the blood (cash flow) from their suppliers, and contributing to the very problem they are complaining about. How is that fair? How is that American? How is that being a true partner for your suppliers?

Here’s a plea to these billion-dollar giants: Stop using your suppliers as your ATM. Don’t offload your financial burdens onto those who are least equipped to bear them. You might think extending payment terms is a smart business decision, but it’s eroding the industry’s foundation. If we want a healthy, competitive PCB and PCBA sector here, we need everyone to step up and play fair.

If you’re a large company, and you see yourself in this column, then I beseech you to stop and urge you to reconsider the impact of these practices. Shorten your payment terms. Pay on time. Be a fair partner to the companies that help you stay competitive because if you want a stable supply chain, you can’t keep undermining the very companies that make it possible. Ultimately, these practices will lead to the demise of your domestic supply base, and then what will you have? Think about this long and hard.

It’s only common sense.

Dan Beaulieu is president of D.B. Management Group.