Why do businesses assume you'll offer them credit terms?

[Karimbo]

And how do you refuse and say pay before dispatch?

I have an event equipment hire business - not big invoices like £500-£600 per invoice.

I supply the same customer usually one-off but sometimes a handful of times.

I have a retail e-commerce business that I'm putting all my focus into and it makes more profit than this rental business.

Really tired of sending quotes, sending details of my business to be "set up as a supplier" then to send over a crapilly filled in PO with the wrong supply date, wrong description asking what my payment terms are.

if you're going to assume you'll be given credit and all that - at least send me a PO with the correct dates. Or better don't assume you'll be given credit terms, always ask first.

Edit: just had this today "I know the PO line item says this, but ignore it, we know what it's for". Yeaaaahh right. If I have to take you to court for this. I'm going to be shit out of luck because what you've left in the line item is something I don't supply.

Anyway. I'm ranting. How do you break the news to them that you're not offering credit terms so a PO isn't needed. Rental must be paid for in advance?

I'm prepared to lose a customer over this, The rental business is actually quite a chore and boring for me now. I've done it for years. I dont like prepping and working for a client before I've received funds.

 

[bodgitt&scarperLTD]

Just tell them it's proforma invoice only, simples.

 

[Bushman]

I just send them a Pro-forma invoice back by return with our bank details for payment

 

[Mark T Jones]

Kind of the above - just tell them.

 

[IanSuth]

Having worked on many events over the years (gigs at and just after uni and then motorcycle rallies for 25 years+) i would say it is because the organisers are juggling having no £ until ticket sales roll in, the more they can get on credit terms the less of their own money they need to risk and the more the chance that if it fails horribly it is you left out of pocket not them.

The only people who give us credit (even with 25 years trading history with them) are the toilet hire and marquee hire people take a 50% deposit upon booking with the balance upon erection/delivery,

Beer supplier also does payment upon delivery but that is because full kegs can be sold elsewhere and are sale or return anyway and the owner is also our licensee so holds the trump card

We are always super careful with gear however as once about 15 years ago a Brandon Hire pickup turned up and collected a generator, then Brandon invoiced us for it's loss, no way to prove it had been collected so now all kit coming on site is photographed and signed for and the same as it leaves - any supplier saying "leave it in the field we will collect at x time" is told when we are leaving site and after that time not our responsibility (a lot of people like loo hire try and get away with leaving it long enough to take straight to next job without a return to yard)

 

[pentel]

Really tired of sending quotes, sending details of my business to be "set up as a supplier" then to send over a crapilly filled in PO with the wrong supply date, wrong description asking what my payment terms are.

Send quote including a link for them to pay using square, payment secures your booking.

 

[MBE2017]

Just tell them it's proforma invoice only, simples.

The first and most simple answer, why not put payment in advance by pro forma invoice on all your quotes?

I had an electrician demand a credit account from myself once, I had a well known rule six months trade history before I would consider ANY account, no matter how big the company was.

I asked him to follow myself and pointed at my electrical wholesaler sign, and asked did it say BANK anywhere in the name? He took the point. He paid cash for years.

 

[Karimbo]

The first and most simple answer, why not put payment in advance by pro forma invoice on all your quotes?

I had an electrician demand a credit account from myself once, I had a well known rule six months trade history before I would consider ANY account, no matter how big the company was.

I asked him to follow myself and pointed at my electrical wholesaler sign, and asked did it say BANK anywhere in the name? He took the point. He paid cash for years.

Thanks I need to do that. Maybe that would avoid the awkward emails.

 

[MBE2017]

Thanks I need to do that. Maybe that would avoid the awkward emails.

It’s your business, you should run it and not be dictated too. You will find a balance I’m sure, everyone has their own way.

 

[Scott DLE]

I’m in the same industry. Most of my hires are for corporate gigs and they do sometimes expect 30 days. At Xmas I had lights booked for lighting up a church, I take 25% deposit up front and final balance a week prior or at the latest prior to delivery.

Anyways said client paid the deposit, but for whatever reason couldn’t get the finance department to pay the balance prior to delivery. I said well sorry we can’t deliver! They had to cancel and I kept the deposit.

I have found when people get credit they generally mess you about for payments in our industry. I have regular clients I do give 30 days too but they book every month or so. It’s a hard one to judge sometimes. The worst is just being Ghosted from the accounts departments.

I’m getting a bit like yourself and feel deflated with the rental industry. Took a big hit during covid and it’s been chaotic ever since.

So basically here is my terms I wack at the bottom of quotes and invoices:

25% non refundable reservation fee with final balance due 7 days prior to event date booking.

Corporate credit cards 3% charge otherwise it’s bank transfer only.

Sure you need to fight for it sometimes! But basically just say we can’t release the kit until the balance is paid. The equipment is too expensive to give out on credit.

 

[JEREMY HAWKE]

Absolutely P££s£s me off no end
We had one this week because they are on 888 days credit with the supermarkets they assumed we would do the same .
No its payment on booking so lets have your card number.

 

[Newchodge]

And how do you refuse and say pay before dispatch?

I have an event equipment hire business - not big invoices like £500-£600 per invoice.

I supply the same customer usually one-off but sometimes a handful of times.

I have a retail e-commerce business that I'm putting all my focus into and it makes more profit than this rental business.

Really tired of sending quotes, sending details of my business to be "set up as a supplier" then to send over a crapilly filled in PO with the wrong supply date, wrong description asking what my payment terms are.

if you're going to assume you'll be given credit and all that - at least send me a PO with the correct dates. Or better don't assume you'll be given credit terms, always ask first.

Edit: just had this today "I know the PO line item says this, but ignore it, we know what it's for". Yeaaaahh right. If I have to take you to court for this. I'm going to be **** out of luck because what you've left in the line item is something I don't supply.

Anyway. I'm ranting. How do you break the news to them that you're not offering credit terms so a PO isn't needed. Rental must be paid for in advance?

I'm prepared to lose a customer over this, The rental business is actually quite a chore and boring for me now. I've done it for years. I dont like prepping and working for a client before I've received funds.

It's not hard. You say 'my terms are payment in advance'. Then you do nothing until you receive payment.

 

[NickGrogan]

The first and most simple answer, why not put payment in advance by pro forma invoice on all your quotes?

I had an electrician demand a credit account from myself once, I had a well known rule six months trade history before I would consider ANY account, no matter how big the company was.

I asked him to follow myself and pointed at my electrical wholesaler sign, and asked did it say BANK anywhere in the name? He took the point. He paid cash for years.

I'd go a step further.

Tell them its payment upfront when they first enquire, before you quote. Tell them again on the quote form, and tell them again with the actual quote.

 

[Bob Morgan]

As the saying goes "Please do not ask for Credit - As a Smack in the Mouth often Offends!"
. . . "In God we Trust! - All others pay CASH!"

 

[pentel]

On the flip side to all the offer no credit comments there are times when it is definitely worth offering credit accounts. However it is essential to carry out thorough credit checks and have red hot credit control measures in place.

From a buyers point of view thorough credit checks on the supplying company are also essential. You need a supplier who has the financial clout to be able to deal with any issues that arise.

 

[4getaboutit]

As above, when it’s a business we’re quoting for we always end the first email quote / call quote with the line “please note we’re not able to provide credit to first time customers. Please note payment will be due at least 48 hours prior to the start date”. It stops any more time being wasted.

We once had a long conversation with someone who insisted that paying 30 days after isn’t us providing credit but just the way business is done and left us a negative review because we wouldn't give them those payment terms, but most people are happy to have things cleared up early.

 

[Clodbuster]

When I was new in the business and to the country, a major land owner with title and all, placed a substantial order and informed me he would pay in a routine at the end of the month. 8 months later finally got paid.
I no longer get bullied or conned. Cash before delivery.

 

[Mark T Jones]

We once had a long conversation with someone who insisted that paying 30 days after isn’t us providing credit but just the way business is done and left us a negative review because we wouldn't give them those payment terms, but most people are happy to have things cleared up early.

Negative review = reinforcement of your terms.

 

[estwig]

Back in the late 90's I started a building firm doing loft conversions and house extensions.

I had vans and tools on the tick, deposits off clients, the tax man and the vat man didn't seem in a hurry to collect, there where stage payments for the building work.

All the builders merchants were falling over themselves to offer terms to a new ltd, without a PG, payment due at the end of the month following the month of invoice, I could fiddle that to 90 days.

Suddenly I was turning over more than £700k a year, with other peoples money and not a PG in sight!

Financial crash of 2008 it all went wrong, I paid the men said sorry to everyone else and walked away, a lot of builders merchants went too.

Don't offer credit, someone like me will take it!

 

[MBE2017]

On the flip side to all the offer no credit comments there are times when it is definitely worth offering credit accounts. However it is essential to carry out thorough credit checks and have red hot credit control measures in place.

From a buyers point of view thorough credit checks on the supplying company are also essential. You need a supplier who has the financial clout to be able to deal with any issues that arise.

I was not advocating no credit and support the above comments completely.

My zero credit stance until six months of cash trading is just my way to try to ensure my clients see any credit granted as hard earned, not easily given, and it can be withdrawn anytime on the spot.

As mentioned everyone has to find their own way, I initially started collecting credit during a very bad recession in the 80’s and my staff’s bonus was linked to any losses taken by my site. As such, I guess my attitude was born during a tough time. I guess it has stayed with myself ever since.

We got full bonuses every year at my site, which was seen as unusual by others.