Read your customer’s terms carefully – it could save you months
Read customer terms carefully because you may be in for a surprise regarding when you can get paid. Very few people cannot amend their terms.
You don’t need to wait 60 days
Recently a client approached me because she was working with a big firm on a rush job for a Vice President. She said it’s so annoying because the thing is, I’m not going to get paid for 60 days.
She sent me her customer’s terms and conditions because she thought they needed to be added to the Hall of Shame, published by the Federation of Private Business. It’s a webpage which names and shames big companies who pay small businesses late.
I looked at the terms, went back to my contact and said have you read the payment section? The clause about payments states:
“The invoice will be paid 60 days after due date, unless stated otherwise in the purchase order”.
There was this misconception that the big corporate only paid on 60 days. However, if the person who is raising the purchase order, in this case the Vice-President, is aware that your payment terms are 14 days and they agree to those terms, they can alter that purchase order. The purchase order could have stated “payment in 14 days”.
Then, the system will have made that payment after 14 days instead of 60 days. Always read the wording carefully. Just because someone tells you our payment terms are 60 days, don’t take their word for it. Look at the contact, review it carefully, see if there’s that little clause:
“Unless otherwise stated on..”
“Unless otherwise agreed by..”
“Unless otherwise agreed in writing…”
If any of those statements are in the contract, it means that 60 day term isn’t fixed. Yes, the company may prefer not to change it but it doesn’t mean they can’t change it. Make sure you read your customers terms carefully.
If there is any way of getting those payment terms down, speak to the person placing the order. They’ve approached you for the order. Tell them your payment terms, explain why your payment terms are your terms and get them to change their payment terms.
It is highly unusual that firms cannot alter their payment terms. You just have to find out how they do it.