In the November/December, 2013 issue of Canadian Contractor magazine, Rob Koci and Steve Payne take a look at the business of “getting paid”.
Their respective articles, Red Flags (page 10) and The Dance (page 11) are geared toward contractors in the Construction industry. Having begun my career in that industry (prior to joining the Trade Publication business), and knowing many of the folks who work in that field, I paid particular attention to these editorials.
Terms of Sale is one of those topics that can make us squirm -- it’s often a case of the proverbial “elephant in the room”.
We’ve done our utmost to ensure client satisfaction. We’ve followed up to ensure our client is happy, and worked out any discrepancies to the best of our ability.
Our invoice has been sent – Terms Net 30 Days (or insert your terms here).
At this point, we are asking for payment.
In any discussion of Terms of Sale, there are a few things we need to keep in mind:
1- We’ve already fulfilled the service or shipped the product. In other words, we’ve completed our part of the contract.
2- Our Sales staff have already taken any necessary follow-up steps to ensure disputes are resolved, or discrepancies have been worked out.
3- We cannot deviate from our normal Terms by making an exception for one customer. To do so could be construed as an unfair business practice. Also, consider the scenario if every client insisted on paying us at 90 days, or 120 days? Would our business be able to withstand such a substantial hit to our cash flow?
4- Every vendor we deal with, whether on a professional or a personal basis, sets their own terms. This is a generally accepted business practice. Our terms are stated on our invoice, which is a legal document.
A colleague whom I highly respect recently made a comment to me that got me to thinking. The comment was: “If we don’t agree to 90 day terms for this specific customer, then we are not offering the best in Customer Service.”
I would argue that the opposite is true. If we do not offer outstanding Customer Service at all times, then we have no right to expect to be paid.
But if we do offer exceptional service, then we, as a professional organization, have every right to expect to be paid within our normal Terms of Sale.
File name: Terms of
– a sometimes
“sticky” topic Sale