Example conversation with Cash & Profit
You
A commercial client wants 60 day payment terms on a £14,000 job. Can I afford that?
Cash & Profit
Tight. You would be funding roughly £4,200 of materials for two months before anything comes back, and your current buffer is about £6,000.
It is survivable on this one job. It is not survivable if you win two more like it.
It is survivable on this one job. It is not survivable if you win two more like it.
You
What would LEO say about the payment terms here?
Cash & Profit
LEO joining. I have read the thread, so I know it is £14,000 over 60 days with about £4,200 of materials up front.
Do not accept 60 days flat. Three things to counter with:
1. Stage payments. 30 percent on order, 40 percent at first fix, balance on completion. This is normal on commercial work and it kills the cash problem MAYA just described.
2. Interest clause. On a B2B debt you are entitled to statutory interest plus fixed compensation. Say so in the contract and late payment stops being free for them.
3. Materials on their account. If they are large enough to demand 60 days, they are large enough to buy the materials directly.
If they refuse all three, the terms are the price. Reprice the job.
Do not accept 60 days flat. Three things to counter with:
1. Stage payments. 30 percent on order, 40 percent at first fix, balance on completion. This is normal on commercial work and it kills the cash problem MAYA just described.
2. Interest clause. On a B2B debt you are entitled to statutory interest plus fixed compensation. Say so in the contract and late payment stops being free for them.
3. Materials on their account. If they are large enough to demand 60 days, they are large enough to buy the materials directly.
If they refuse all three, the terms are the price. Reprice the job.
No new conversation, no retyping. LEO arrived already knowing the numbers.
AvoidCopying the answer into a new conversation with a different specialist and retyping the background.
Do this insteadAsking MAYA about the pricing, then in the same thread: what would LEO say about the payment terms here?
One keeps your business in one place. The other splits it across threads that never see each other.
Pairs worth knowing
- MAYA and MARCUS, when a pricing decision has a tax consequence
- GRACE and LEO, when a people problem becomes a contract problem
- NINA and LUKE, when a campaign needs the actual words written
- MAYA and LEO, when you are quoting work and setting terms at once
Try it on your business
Every lesson ends with a question to hand to a Greymill specialist, who answers with what it knows about your business.
More in Ask better questions
- Say what your business isAsk about a topic and you get a textbook. Describe a situation and you get advice.Read the lesson
- Say what you want backOtherwise you get paragraphs when you wanted an email.Read the lesson
- Push back on the first answerOne question, one answer, silence. That is where most people stop, and it is the worst way to use this.Read the lesson