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TIL a 30-day payment term actually costs you money, found it in a book on small business finance.
The author broke down how a net 30 invoice at 5% inflation means you lose over 4% of the real value by the time you get paid. I always just sent terms without thinking. What's the shortest payment window you've ever gotten a client to agree to?
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blairm7724d ago
My plumber gets paid same day, so 5% inflation seems a bit overblown.
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drew93424d ago
Honestly, my plumber charges way more than he did two years ago for the same jobs. I just paid $400 to fix a leaky faucet that was half that before. His parts cost went up and he said he had to raise rates to cover his own bills.
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alice81724d ago
We got our best client down to net 15 by showing them the math on our financing costs. It took a real conversation about how late payments affect our ability to stock materials. Now they pay faster and our cash flow is way smoother.
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