Guide
Negotiate payment terms that protect your cash flow
Small changes to when you pay can make a big difference to how much cash you have on hand.
Ask for net-30 or net-60 terms, even as a new customer
Many suppliers will offer delayed payment terms if you simply ask, especially once you've placed a first order or two on their standard terms. The worst they say is no.
Try to match payment terms to your own sales cycle
If your customers typically pay you in 30 days, paying your supplier in 30 days keeps your cash flow roughly neutral instead of constantly financing the gap yourself.
Ask about early payment discounts too
Some suppliers offer 1-2% off for paying within 10 days instead of 30. If you have the cash available, this can be a better return than most short-term investments.
Get every agreed term in writing
A verbal 'sure, net-30 is fine' has a way of reverting to the standard invoice terms the moment there's a new person handling their accounts receivable. Get it in the contract or a confirmation email.
That’s the whole thing.
Keep going
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