Finance Accounts Payable Agreement

Finance Accounts Payable Agreement

This Working Capital Optimization Agreement ("the Agreement") is made and entered into on this 1st day of January 2050, by and between [Your Company Name] ("the Company"), and [Your Partner Company Name / Second Party] ("the Partner"), collectively referred to as "the Parties".

WHEREAS the Company wishes to optimize its working capital by extending its payment terms with its suppliers, thus availing more time to convert inventory into sales and collect receivables;

AND WHEREAS the Partner is willing to accept such extended payment terms;


In light of the mutual commitments and agreements detailed within this document, and taking into account other significant and valuable considerations contributed by both parties, the receipt and adequacy of which are both hereby formally recognized and confirmed, it is agreed upon by all involved parties as detailed below:


The Company shall extend its payment terms with the Partner to a period of ninety (90) days from the date of the invoice. Should the Company fail to make payments within this extended period, a penalty rate of 2% per month will be imposed on the overdue amount.


The Company is obligated to deploy all reasonably possible efforts to expedite the process of collecting its receivables. By doing so, it will prevent any unnecessary delays in the process of making payments to the Partner. It is understood and expected that the Company will proactively manage its collection of receivables to ensure a smooth and timely process for making payments to the Partner. The goal is to avoid any unnecessary holdups in the payment process, as any delay would potentially impact the financial relationship with the Partner.


The Company is committed to ensuring the optimization of its inventory to the sales conversion process. To achieve this, it promises to put into effect the necessary measures that will boost productivity. In addition, the Company also promises to implement strategies aimed at augmenting sales. This commitment is part of a broader drive to ensure that the Company effectively meets its targets and objectives while delivering satisfactory services to its esteemed clients.


If one party involved in this Agreement does not adhere to the conditions specified within it, the affected party holds the right to bring this Agreement to an end. This is applicable if the party in breach doesn't take corrective action to remedy the failure within a period that can be deemed reasonable. However, it is a necessity that this desired termination of the Agreement by the affected party must be communicated to the other party in a written manner.


In the acknowledgment and witnessing of this agreement, the parties involved have shown their approval and executed the terms of this Agreement. This consent was given and the agreement was executed on the original date indicated above and has been in effect since that stated year and day.


[Your Company Name]

[Month Day, Year]


[Your Partner Company Name]

[Month Day, Year]