A supplier is a natural or legal person who sells products or services related to their usual activity to a company so that they can transform and sell them or sell them directly to the end customer.

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The supplier supplies needs that have to do with the production or activity of the company.

Most common types of suppliers

There are 3 most common types of suppliers:

• Goods supplier: These are suppliers who are dedicated to supplying the company with products related to their activity. For example, for a car mechanic their goods suppliers are those who sell them shock absorbers, brake pads, wheels…

• Service supplier: These are those who sell an intangible but necessary service for the development of the company’s activity. For example, service suppliers are telephone companies, advisors and managers, lawyers, invoicing software providers… ;)

• Resource supplier: These are those who provide your company with economic resources to be able to develop the activity. For example, a banking entity that offers you credits.

Payment method to suppliers

Although it is possible to pay cash to your suppliers as soon as they deliver the goods, it is very common for payment to be deferred to 30 and 60 days to obtain time and be able to acquire more liquidity by doing your business before paying your supplier.

Likewise, both the payment method and terms, deferrals… are negotiated between the client and the supplier, so there is a lot of freedom.

I hope this information is useful to you :)