Negotiate Better Supplier Payment Terms
The Commercial Payments Bill sets a 60-day maximum payment period for private companies. This shift can squeeze your margins if you don't negotiate better terms. Founders should reassess their exposure and leverage the bill to secure more favorable payment terms.
- The 60-Day Payment Shift: What You Need to Know
- What this means for a business doing £200k-£2m revenue
- The three moves smart operators are making right now
- How AskBiz Helps You Negotiate Better Supplier Payment Terms
- The warning signs to watch for in the next 30 days
The 60-Day Payment Shift: What You Need to Know#
According to Construction News, the Commercial Payments Bill standardizes maximum payment periods to 60 days for private companies and 30 days for public bodies. This change can significantly impact your cash flow. Before, payment terms were often open to negotiation, but now you have a clear benchmark to work with. Consider a Leicester-based Shopify seller doing £40k/month - with the new bill, they can negotiate better terms and reduce their cash flow pressure.
What this means for a business doing £200k-£2m revenue#
For a business with £200k-£2m revenue, the new payment terms can save up to £10,000 per month in cash flow. To take advantage of this, you should reassess your supplier agreements and negotiate better terms. This might involve rethinking your costs and adjusting your pricing strategy to remain competitive. According to Consultancy-me.com, understanding your exposure relative to competitors is crucial in identifying areas where you can negotiate better terms.
The three moves smart operators are making right now#
Smart operators are making three key moves: firstly, they're modeling their exposure relative to competitors to identify areas for negotiation; secondly, they're using negotiation training programs that provide immersive, pressure-rehearsal experiences to refine their negotiation skills; thirdly, they're considering the shift from globalization to regionalization to become a cost leader and secure more favorable payment terms. The Gap Partnership’s Complete Skilled Negotiator and Scotwork's recorded role-plays with coached review are examples of effective negotiation training programs.
How AskBiz Helps You Negotiate Better Supplier Payment Terms#
AskBiz's CFO Dashboard and cash flow forecasting features help you identify areas where you can negotiate better payment terms. By typing a question like 'what's my average payment period for suppliers?', AskBiz surfaces a detailed analysis of your payment terms and cash flow pressure points. This enables you to make informed decisions and negotiate more effectively with your suppliers.
The warning signs to watch for in the next 30 days#
Watch for signs that your suppliers are taking advantage of the new payment terms, such as delayed payments or increased prices. Also, monitor your cash flow closely to ensure you're not experiencing undue pressure. Check your accounts payable and receivable regularly to identify potential issues.
Your action plan for this week#
Review your supplier agreements and identify areas for negotiation. Set up a meeting with your suppliers to discuss new payment terms. Track your cash flow and accounts payable closely to ensure you're not experiencing undue pressure. Take action before the end of the week to secure more favorable payment terms and reduce your cash flow pressure.
People also ask
How to negotiate better supplier payment terms
Use the Commercial Payments Bill as a benchmark and model your exposure relative to competitors to identify areas for negotiation. According to Consultancy-me.com, this can help you secure more favorable terms and reduce cash flow pressure.
What is the Commercial Payments Bill
The Commercial Payments Bill is a regulation that standardizes maximum payment periods to 60 days for private companies and 30 days for public bodies, aiming to reduce cash flow pressure on businesses.
How does the Commercial Payments Bill affect SMEs
The Commercial Payments Bill can significantly impact SMEs by reducing their cash flow pressure and increasing their competitiveness. According to Construction News, SMEs can use the bill to negotiate better payment terms with their suppliers.
What is a good payment term for suppliers
A good payment term for suppliers depends on the industry and the supplier's requirements. However, according to the Commercial Payments Bill, a maximum payment period of 60 days is considered standard for private companies.
How does AskBiz help with supplier negotiation
AskBiz's CFO Dashboard and cash flow forecasting features help you identify areas where you can negotiate better payment terms. By providing a detailed analysis of your payment terms and cash flow pressure points, AskBiz enables you to make informed decisions and negotiate more effectively with your suppliers.
Alice Watson is AskBiz's Head of Market Intelligence. She tracks regulatory shifts, pricing trends, and growth signals across global SME markets — and turns them into briefings founders can act on before their competitors notice.
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