Payments Terms

Question:

We would like to direct ship to our accounts. What are standard terms for payment, credit cards, collections or guidelines to follow?

Answer:

Boy, that one is tough. We started doing credit cards late in the game. Credit cards does give you the option of using that method for the first few orders. Remember you lose money on card charge fees. It does add up.

If you are on a net/30 and your product doesn’t sell well, and they lose interest, they may lose interest in paying you. After a few re-orders you and they have a relationship. You can do net/upon receipt for the first couple times, then net/30, but get a feel for them first.

Long established stores that a Rep says is okay, you can go to net/30 right off. The Rep may even require it. A Rep can work very hard for a sale. They will expect you to take a gamble too. Don’t be afraid to ask questions though.

You can do credit checks, use Dun & Bradstreet, etc, but that is time consuming and; who’s to say, those few accounts they give you are paid well and the rest of their accounts are treated like dirt? Best to have in place some parameters and get good at reading people and between the lines. A good set of payment rules, makes a difference. If payment is not right on time, given time for mail, to and from; call, email or fax them.

You will need to become a good bill collector, it is inevitable, so get used to it now. Get every phone number, contact information you can on a, “Net/Upon….”. Get their Home number, Sister’s number, Mother’s number :o)….etc.

You don’t get mad, you get persistent. Out of thousands, upon thousands of orders, over about seven years, we had three small accounts, we never collected.