Payment terms, how lenient should you be?

[Ian J]

ROT means Reservation of Title

 

[Talay]

I have one supplier who offers me 3% off my invoice on top of whatever I have negotiated as a price or however much I have had thrown in to sweeten the deal.

It is payment with 7 or 10 days (can't remember) but on a £5k order that is £150 off and I spent that the other week at the local pizza place. Seems far better to me to be in my pocket than theirs.

Some suppliers give discount for pro forma, some go 10/14 days, some end of current month but most are now end of current month plus 30 days.

I pay whenever it suits, always within terms but I am certainly incentivised to pay early for even a few percentage off. It is worth thousands to me each year.

 

[Rekkovitch]

I think unless you have scale, then the extra worry & admin of offering credit just isn't worth the hassle. Nope, I have to pay my supplier upfront ...so payment upfront by my customers is how it is for me now.



.

I couldn't agree more , I don't offer credit in any way, it's payment inadvance

 

[andygambles]

That's pretty standard in industry

It might be standard for some. In which case the query should be raised about payment date the moment the invoice arrives. Not when payment is being chased. The customer has no right to be annoyed. They have had 30 days to ring up and say "Actually we pay everyone at the end of the month, is that OK?"

We give some customers credit but we are in the fortunate position of selling something we can turn off if they don't pay. That means if payment is late it arrives within 30 minutes of us chasing it.