Q: Kevin, I have recently had several
new customers change payment terms on me after contracts are signed. Do you
have any advice on how I can get paid on my terms?
A: Ah yes, the wonderful world of
payment terms. This is truly one of those topics that I do not enjoy
discussing, but it must be addressed on an almost every day basis now. How a
sales person deals with this topic can frame a great deal of the business
Sales people, unfortunately, are almost
never trained or taught to address payment terms with a prospect or customer.
In most cases I have found sales people are just told what their company terms
are and do not discuss it further. When a customer brings the subject up, which
seems to be after contracts are signed, the customer takes control and states
what their payment policy is – period. This frustrates me because in most cases
their terms are much longer than your terms thus extending you and them.
Sales people should address getting paid
as part of the sales process. You should present your payment terms at the same
time you are presenting the price of goods or services. You should ask the
customer if they are acceptable to your terms or if they have something
required on their end. Payment for your goods or services should be, if needed,
negotiated, agreed upon in signature, and then held to this standard going
Payment terms, at times, cannot be
negotiated, and may need to be on the customers terms only. If this is the
case, and your company is acceptable to these terms, they should still be agreed
upon in writing as part of your contract. There should be penalties for failure
to make timely payments. The customer must be agreeable to signing on these
terms, especially if you are accepting their schedule.