Posted: February 7th, 2023

Hello Marcus, Thanks for providing examples in this response. I’ve worked for

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Hello Marcus,
Thanks for providing examples in this response.
I’ve worked for a company before that always paid their credit as soon as possible (within 10 days), and others that would try to push it out to sometimes even 90 days. There can certainly be savings to paying credit promptly, as you stated. For example, a time where this is very important would be towards the end of the year. Sales teams take advantage of this time to leverage sales before year end. Based on experience, this is a tactic that is used often and can actually lead to companies saving amounts of cash for the end of year to take advantage of deals.
There are a few other ways you could approach a net-term deal, you could ask for percentages due at different times throughout the transaction. For example, 30% at signing, 50% at another defined stage during the project, and 20% upon completion (Wines, 2017). For some, this could be a dangerous agreement as it could result in an upaid balance if the project does not go to plan, this could be rare but it is a consideration.
References:
By. (2017, July 31). What net payment terms are best to use for your business? Richard A. Hall, PC. Retrieved February 1, 2023, from https://richardahallpc.us/net-payment-terms-best-use-business/

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