Question

You are employed as an accountant for Innovative Computing. Your company is in the process of signing a large contract with an electronics components supplier. You have a friend who works for the electronics components supplier, and you are aware of the company having trouble paying bills. Explain why you should or should not report this to your employer before the purchase.

Answer 1

In this case, there is no need informing the management regarding this supplier is nonpayer to their suppliers. That will affect our company directly. Because the payment is in our hand. And we are the payer. Any how let see the indirect impact due to this.

· If the company should not pay on time to their suppliers, that will lead to break the supply of raw materials, services or any other thing to that supplier will lead to a delay in our supply also.

· And if any of the supplier raise any legal case against that supplier will be negatively affect our supply and it will affect our business also.

· If the liability increases, that means the supplier do not have enough cash flow, that may lead to shut down of the company. That may lead to supply of our products.

Anyway, the above points are only a possibility and maybe they will supply smoothly and no break in the business.