New payment terms from one of my customers

One of my customers has just sent letters out telling everyone how big they are now all over the world as they have now merged with 5 other companies,

Then go on to say new payment terms are 75 days end of month + 3

Lucky i dont do a mass of work for them, vans only, but they can sod off now

But my mate has 28 13.6m trailers per week out of there all over the uk :( his invoices will be a total of £275k give or take on them terms

Seems the norm for most large concerns. Not a problem when in the 'swing' of it.

Can't see it affecting 'one man band's' though, as they would not get on many large companies suppliers lists in the first place.

Thankfully alan i dont do shed loads for them, most of ours are 60 days but 100 + forget it

Solution 1. Up the price by 5%. If they notice and query, simply say it's to cover their longer payment terms.

Solution 2. If on already fixed prices, write back saying existing fixed prices only applicable to existing payment terms.

With 28 trailers a week, who blinks first when push comes to shove?

I hope the debt is insured!

Dennis said:

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Solution 1. Up the price by 5%. If they notice and query, simply say it's to cover their longer payment terms.

Solution 2. If on already fixed prices, write back saying existing fixed prices only applicable to existing payment terms.

With 28 trailers a week, who blinks first when push comes to shove?

Hard to suddenly 'up prices' if you have already negotiated a contract! [that is if you want to continue the partnership]

most of ours are 60 days but 100 + forget it

I tend to agree that 100 days + is out of order Simon, would depend upon volume of work, relationship etc etc. Hard to be specific!

See what they say on thusday when they ring up for the normal van 60 days and payment on 60days or no van end of

Personally i wouldnt give 60, days to anyone. If i did give those terms the price would certainly be high. 75 days is a funny number yes its better than 90 days. Hope your mate can handle the the change in terms. This is what sends many hauliers under

We have a customer on standard 30 days. No problem.

We called when payment was late and was told we now pay on 60 Days ( It's nice for customers to vary our terms)

we had the same company print our dockets and they sent us an invoice.

After 33 days they called and said we have an outstanding invoice.

Oh a said we now pay on 60 days, "You can't do that she said they are our terms of business"

I said i know but you changed ours. "Fair enough she said" pay in 60.

This nearly always starts from YOUR customer being put under pressure from THEIR customer who is being put under pressure from one of the major supermarkets to comply with 120 day terms... Or longer!

021 SAMEDAY said:

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This nearly always starts from YOUR customer being put under pressure from THEIR customer who is being put under pressure from one of the major supermarkets to comply with 120 day terms... Or longer!

I'm sure there are many reasons some have to change their payment terms, but that doesn't mean we have to play along. If they have cash flow problems, why should they become my cash flow problems?

Once you get stuck with long payment terms it's difficult to get out of them, purely becasue of the outstanding debt, and the need to keep em sweet. Experience tells me that's the time to get out