how to negotiate b2b credit terms

How to Negotiate Credit Terms with Your Customers

If you have customers looking for you to grant credit terms, they’re going to typically want 30 days or more to pay. That can be a big drain on your cash flow if you have to wait for them to pay, but more importantly, you have to look at whether that customer can actually be granted those terms. On this episode of Eagle Eye, I discuss how you can negotiate credit terms with your customers and make sure you get paid for your work.

Is Your Customer Credit Worthy?

Are they credit worthy enough for you to extend that credit? You are effectively giving them funding on the sale that you’re making. Feel free to ask them for credit references, trade references, and if they have a D-U-N-S number. You can look up their credit report. Customers should be readily willing and able to supply that information to you so that you can make a credit decision on their business. Naturally, giving them credit terms means that you can remain competitive in the marketplace. You may have a competitive supplier that is already giving them credit. You have to look at whether they’re already maxing out credit with another supplier as well. So, it takes some work to really get to know your customer and understand whether there could be some credit risks involved in giving them credit.

customer nonpayment

Do You Need Help Negotiating Credit Terms?

You might want to consider talking to a factoring company. they can help you when it comes to negotiating credit with your customers. We have access to a lot of credit reference agency information and more importantly, payment information. So again, if you feel you need to get some advice on whether you customer is credit worthy up to a certain amount, give us a call. It’s one of those things that we do all the time. We understand that it’s important for you to give credit to your customers. We don’t want you to make the wrong decision and give too much credit to somebody and they really don’t have the ability to pay.

Factoring Can Help You Negotiate B2B Credit Terms

So, managing credit is a really difficult thing, especially if you aren’t familiar with it. Factoring can help free up your cash flow when you are giving credit to those customers. We bridge that gap between when you complete the sale and when the customers pay you in accordance with the credit terms you’ve granted.

On the flip side, if you’re getting accelerated cash flow, you can negotiate better terms with your suppliers. So, if you have credit with factoring, you can sometimes not need to use as much credit with your suppliers. Then, you can negotiate a payment discount with them. So, factoring with Eagle can help you on both sides of the equation. We free up the cash and help pay your suppliers. Also, we monitor and manage the credit of your customers. This makes sure those credit terms aren’t abused in any way.

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