D_Blackwell - 10:57 pm on Nov 15, 2008 (gmt 0)

I probably hold a minority view here, but don't use OPM (other people's money) model in or out.

It does depend upon the industry and if you are wholesaling large orders. We are cash on the barrel head buyers, even in areas where this is not the norm. This gives us the extra clout to demand top service, responsiveness... and frankly, we don't need terms so it is simply easier accounting to pay upfront.

When selling, there are simply many industries where 30 days is the norm (and actual payment norm may be closer to 90 days). These industries and business would collapse if they did not have the ability to float YOUR money. You've got to price that in, because they simply do not have the cash or cash flow to pay you upfront. (This practice, while standard, is an invitation to disaster if companies are not run soundly.)

D&B reports aren't a silver bullet, but you get a pretty good feel for how a company stands within its industry and compare their averages. We just closed a deal with a vendor where the industry averages a quite good 10 day to payment average. This company has been around a long time, has a good reputation, looks to be sound, but is a very slow payer; averaging 40 - 50 days to pay. We know their customer service to be poor, but the product is good, and we will be making large, cash orders so the downside looks acceptable.

When selling, wholesale payment is due on receipt with a percentage penalty for every fifteen days late. Frankly, that's not really our area, and we don't look towards businesses or industries that need to float cash to do business. It's not sound, and not for us. We do this on an 'as necessary' or 'as needed' basis only. Selling, we are primarily retailers, so less of a factor for us than others here.

With webwork/software, we don't even give clients a chance to dig a hole or screw us. X% up front. X% upon completion of X% of the work and so forth. Otherwise, you could wind up having done the work, turned over the work, and never see a nickel. Suing is cost prohibitive in a hurry.

The industry, and which side your on, can make a lot of difference.