4 ms·
It's often not that they're really trying to screw the vendor, but that their cash flow doesn't allow immediate payment. A lot of commercial invoices have paym
by ams6110 8y ago
It's often not that they're really trying to screw the vendor, but that their cash flow doesn't allow immediate payment.
A lot of commercial invoices have payment terms like "2/10, net 30" meaning you can take a 2% discount if you pay within 10 days. The cost of not taking this deal is an effective 35% annualized interest rate, so it's a big incentive to pay early, assuming your cash flow allows it.
- sbarre 8y agoI used to do this as a freelancer.. Some clients would insist on 45 or 60-day terms for my invoices, and as a self-employed individual (who at the time couldn't afford to be picky about my contracts), this really sucked. Then someone suggested to me I put a clause offering a 2% discount if they paid within 15 days. I definitely remember some of my clients taking me up on that and paying quickly, and it was a big help..
- chrisbennet 8y agoI remember the first time I discovered what “30day net” meant. “What? You’re going to borrow my money for 30days???” I’m a consultant and I charge $N for 30 net and 25% off if payed in 10. (25% is not a typo.) Very few of my clients do the math and decide they want to borrow my money for the full month.