SINGAPORE: When clients become friends, chasing them to pay for their orders can be awkward. But with more delayed payments as food and beverage businesses struggle to stay afloat, suppliers say they have little choice.
“Everybody is suffering … no one is spared. Even the giants are taking a longer time to pay us,” said Mr Ken Tan, second-generation co-owner of Dessert Guru, which sells purees, syrups and bubble tea toppings to other businesses.
Customers who were supposed to settle their bills within 30 days are now taking up to 120, he said, adding that late payments became more frequent starting in late 2023.
Late payments affect liquidity as Dessert Guru pays its own suppliers in cash when goods are delivered or within a month.
“We are paying upfront … only for them to pay us back in three to four months, so it’s a bit painful for us,” he said.
AN INDUSTRY UNDER PRESSURE
The F&B sector has been a weak spot in Singapore’s economy. The Monetary Authority of Singapore noted in July that the industry’s sales have been in broad decline for three years, while the Ministry of Trade and Industry said in August it expects lacklustre growth for the sector as locals spend more abroad.
Over 3,000 F&B establishments in Singapore closed in 2024, the highest in almost two decades. High-profile casualties this year – including the closure of Prive Group’s restaurants and several Haidilao outlets – have underscored the industry’s troubles.
Faced with mounting risks, suppliers are tightening credit lines and enforcing payment terms.
“It’s just becoming more and more important to … really strictly enforce it,” said Ms Natasha Chiam, founder of The Ice Cream and Cookie Co.
She recalled how long-standing clients sometimes promised to pay later or asked for flexibility. “You know the chef and you’re like, we’ve been working together for eight years, what can go wrong? But it can go wrong.”
Her policy now when clients miss a deadline? No payment, no delivery.
