Customer extending payment terms

Hi

I have been doing business with a large organisation for a number of years. Now they are trying to make me to sign an annual contract stipulating that payment terms are 9 weeks and that late payment can only be considered after this period and that unless the contract is signed, I will get no more work from them.
Are they entitled to do this or is this against the law and what can I do about it?

Dear Brian

You can alter terms by mutual consent. The question is whether it makes business sense for you to do so. Are they a substantial customer and would the custom outweigh the stretch on your cashflow that would be imposed by the extended credit you would be offering them?

Best wishes



Chris

Hi Chris

The client is not a substantial one but it is going to make a difference to my business if I refuse to sign the contract and I loose the customer. Yes we could extend the credit to them but it would make life more difficult. There is also the principal of what they are doing? As a small business I think they are using their position as a large company to take advantage.

Can the late payment legislation not be used in this situation? After all, that is what they are trying to do. Pay late!

Brian

Hi Brian

The problem with the legislation was that it was designed to be voluntary, a deterrent and to offer a default credit period of thirty days if no terms had been agreed. I wonder if it is possible for you to reach a compromise. Your client relies on your support to deliver their service and/or product and I am sure that changing suppliers with all the uncertainties that go with it is their least favoured option?

Regards



Chris