So I started a new job in a small design and manufacturing business, and while it is in an industry I like the pressure is huge. The business is hanging by a thread with payments and has a liquidity ratio of 0.4 (This measures how much it could pay off a months expenses in one go with 1 being 1 month) the fact that our company can barely cover 2 weeks of expenses while also selectively not issuing payment until being threatened with legal action disturbed me greatly. I decided to ask a couple of CEO's of sub 100 employee companies on LinkedIn their thoughts on this.
One replied, here was his answer: “Hi X this kind of practice is common, it isn't good but more prevalent since covid. The main reason is often because their own clients do this too. Like a knock on effect. “
This horrifies me. The fact businesses view it as moral and necessary to not pay off debts because they can chills me. If you refused to pay your debts for up to 4 months, you'd be thrown in prison or into bankruptcy multiple times, or your possessions would be all repossessed within the week. The fact companies can just refuse to pay for months on end shows that capitalism perverts human behaviour and leaves us all on the edge of collapse.
I am now looking for an exit after barely a month at this company and moving to one with far more stability.