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Would you accept Payment NET 90?

Discussion in 'General Business Forum' started by columbo, Jun 11, 2018.

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  1. columbo

    columbo UKBF Regular Free Member

    332 72
    A new customer - large-sized business (10,000+employees) has just stated that their payment terms are NET 90. Conveniently, they only state this after the job is done!

    That was a surprise. Job value is just under £1000.

    Luckily, the deliverable of this job is in digital format and I could easily hold on to. I really think that NET90 is taking the p1ss. Opinions? Should I just refuse and tell them we accept credit cards and job cannot be released until payment in full.
     
    Posted: Jun 11, 2018 By: columbo Member since: Jan 27, 2013
    #1
  2. Mr D

    Mr D UKBF Legend Free Member

    17,261 1,935
    The contract you had before the job - what did it say about payment terms?
     
    Posted: Jun 11, 2018 By: Mr D Member since: Feb 12, 2017
    #2
  3. columbo

    columbo UKBF Regular Free Member

    332 72
    I did'nt even look TBH.
     
    Posted: Jun 11, 2018 By: columbo Member since: Jan 27, 2013
    #3
  4. Mr D

    Mr D UKBF Legend Free Member

    17,261 1,935
    Might be an idea to look now?
     
    Posted: Jun 11, 2018 By: Mr D Member since: Feb 12, 2017
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  5. Gordon - Commercial Finance

    Gordon - Commercial Finance UKBF Ace Free Member

    1,606 442
    Then you only have yourself to blame. Suck it up and accept the 90 days, and call it a learning experience. Just make sure you do actually learn something.
     
    Posted: Jun 12, 2018 By: Gordon - Commercial Finance Member since: Jun 26, 2017
    #5
  6. JEREMY HAWKE

    JEREMY HAWKE UKBF Legend Full Member

    4,096 1,290
    I don't see the problem most of the Clarion suppliers were happy to give 90 days credit

    This topic needs a serous discussion in general There have been some retail casualties this week a couple of companies moving things to other parts of Europe
    Leaving the EU will no doubt do some damage to companies A look at how credit is given or given at all is something to consider
     
    Posted: Jun 12, 2018 By: JEREMY HAWKE Member since: Mar 4, 2008
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  7. Nico Albrecht

    Nico Albrecht UKBF Enthusiast Full Member - Verified Business

    592 100
    You should be in control of giving terms not them. It wouldn't be unusual for bigger companies to have 90 - 120 day terms. I normally ask the business what would work best for them and their accounting. By default I would give B2B 30 days. If it is a solid company 60 - 90 days is fine with me.
     
    Posted: Jun 12, 2018 By: Nico Albrecht Member since: May 2, 2017
    #7
  8. Gordon - Commercial Finance

    Gordon - Commercial Finance UKBF Ace Free Member

    1,606 442
    Out of curiosity, how do you define and measure that?
     
    Posted: Jun 12, 2018 By: Gordon - Commercial Finance Member since: Jun 26, 2017
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  9. HazelC

    HazelC UKBF Enthusiast Free Member

    973 227
    I would / and always do check in advance.

    My payment terms are 14 days; I ask at the very beginning, before I do any work. if they are okay with this. If not to tell me their terms and I will see what I can do. It is then my decision if I will work to their payment terms or walk away if they are not willing to meet mine.
     
    Posted: Jun 12, 2018 By: HazelC Member since: Sep 7, 2013
    #9
  10. pentel

    pentel UKBF Regular Free Member

    429 69
    The sales discussion consists of agreeing what will be supplied, how much for, when it will be delivered, and when payment will be made.

    Unfortunately most sales people forget about the last (and probably the most important ) part of this list.

    If we cant agree on all of these points probably best to walk away.
     
    Posted: Jun 12, 2018 By: pentel Member since: Mar 12, 2011
    #10
  11. Nico Albrecht

    Nico Albrecht UKBF Enthusiast Full Member - Verified Business

    592 100
    I do a lot of work for government agencies. They are very slow payers but pay at some stage. 30 days net with them always becomes 60 days. Also solicitors they seem to pay slow but solid payers same goes for accounting companies. Never had issues there. But in my line of business people are happy to pay tbh.
     
    Posted: Jun 12, 2018 By: Nico Albrecht Member since: May 2, 2017
    #11
  12. estwig

    estwig UKBF Legend Free Member

    12,302 4,309
    I've done, you owe.

    I make my terms quite clear, I expect and 9 times out of ten get, payment the same day I issue an invoice. I am not a bank, I do not offer terms, you pay me when I tell you to.
     
    Posted: Jun 12, 2018 By: estwig Member since: Sep 29, 2006
    #12
  13. xjr13m

    xjr13m UKBF Contributor Free Member

    36 1
    It's not unusual for large 'blue chip' companies to have long payment terms. I supply several of these companies and their terms (at best) are typically 60 days EOM or 90 days net. One of my customers (the first name in Baked Beans) pays an eye watering 90 days EOM, so up to 120 days depending on when the invoice lands. My best customer pays 30 days from invoice date. Fortunately I am supplying a bespoke service so I'm able to uplift my invoices to according to a particular customer's payment profile. They are using me as a line of credit and I'm effectively charging them for that; both parties are 'happy'. I appreciate that those in a more competitive environment are under pressure to quote the lowest price while being screwed on payment terms.
     
    Posted: Jun 12, 2018 By: xjr13m Member since: Aug 6, 2012
    #13
  14. billybob99

    billybob99 UKBF Regular Free Member

    1,208 280
    There are always going to be people banging on here saying, my terms, and you pay me when I tell you to.

    These people obviously are in completely different industries and have never had a big corporate or blue chip client.

    As xjr13m mentioned it is not unusual, in fact its pretty much the norm.

    Been there myself, and early days major cash-flow issue. Most were 90 days, a lot were 60 days, and bearing in mind that's 90 or 60 days after the work has been signed off.

    If it's a 2 months project, you're basically waiting 5+ months to get paid - and I have to pay all my staff and sub-contractors regularly.

    Obviously you can say no and not do the work, but the big boys usually dictate the terms.

    I'm not sure why you'd want to refuse, as long as its a reliable company, you're going to get paid. If £1k is going to make or break you, then what are you going to do if you land a major client?
     
    Last edited: Jun 13, 2018
    Posted: Jun 13, 2018 By: billybob99 Member since: Apr 23, 2013
    #14
  15. MikeJ

    MikeJ UKBF Big Shot Free Member

    5,677 1,631
    You want to work in the Middle East. We've had to wait 9 months for payment from the Saudis (but they do pay eventually...).

    Oddly enough, we've just had a major customer offer us faster payment terms in return for a discount. Guess it depends on whether they're cash rich or not.
     
    Posted: Jun 13, 2018 By: MikeJ Member since: Jan 15, 2008
    #15
  16. Ian J

    Ian J Factoring Specialist Full Member - Verified Business

    5,397 1,556
    So do many major supermarkets as well as Boots and loads of construction companies and really it's these large concerns that call the shots as if you want to deal with them you do so on their terms and if you don't want to then there are plenty more that will
     
    Posted: Jun 13, 2018 By: Ian J Member since: Nov 6, 2004
    #16
  17. TODonnell

    TODonnell UKBF Ace Full Member

    1,406 214
    - 'Buy now, pay later' can work as a marketing gimmick.

    - The only reason that people expect to pay you later, for something you've supplied right now, is culture. We think it's acceptable, because it's the norm.

    - 30/90/120 days to pay leaves wiggle-room for deadbeats who may not pay you at all. In that scenario, knowing what buttons to press to gee them up is useful, including court action.

    - It's all about leverage; a wealthy client can and does leave the 'little people' to starve. If you need them more than they need you, you have to put up with it.

    - I think it was dear old Michael Heseltine who let the cat out of the bag many years ago when he said letting invoices 'hang' was normal business practice for his ilk.

    - If you're confident you can get deposits up front and then payment in full within 7 days after completion, then state it in your contract. People don't respect those who are craven.
     
    Posted: Jun 13, 2018 By: TODonnell Member since: Sep 23, 2011
    #17
  18. Ian J

    Ian J Factoring Specialist Full Member - Verified Business

    5,397 1,556
    In the late sixties Arnold Weinstock built up a huge industrial empire using creditors money as if you wanted to deal with AEI or it's associated companies you had to accept 90 day terms. Weinstock's companies built up a huge cash pile which was used as his war chest to buy additional companies.

    His huge empire fell apart after Weinstock's retirement but that's another story
     
    Posted: Jun 13, 2018 By: Ian J Member since: Nov 6, 2004
    #18
  19. DontAsk

    DontAsk UKBF Ace Free Member

    1,069 140
    It fell apart in part because they used the cash, rather than shares, to purchase other companies. Then share prices tanked...

    Contrast with Vodafones purchase of Mannesman at the same time, where they paid in shares.
     
    Posted: Jun 13, 2018 By: DontAsk Member since: Jan 7, 2015
    #19
  20. Michael_Oxlong

    Michael_Oxlong UKBF Newcomer Free Member

    9 0
    Accept? Ideally No.
    Occasionally get paid on; well, yeah that happens.

    I've chased up an invoice this week that's about to hit 60 days. I know they're good for it. It's just that they're so automated and procedural that it takes ages. No point pushing it and souring a relationship; I'd rather take the occasional work from them and just forecast it appropriately.
     
    Posted: Jun 13, 2018 By: Michael_Oxlong Member since: Apr 18, 2018
    #20
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