I'm in the starting phase of my business and I realize that not everyone has the money they need for their bills immediately. Generally speaking how many days should I give my customers to pay their bill? What are the issues with too long or short of a period? If answering what is the context of your business (as each industry may have different standards).
Largely it depends on what you are selling, what supplier agreements you already have in place, and how your cashflow looks.
Hi John, I am currently in auto parts niche and had that problem with a few customers under terms. you may want to check this out, hope this could help : https://www.affirm.com/ ,
It dependedepends from industry to industry....if your in FMCG then mostly no credit in followed or if your in industrial supply then 6 to 8 credit is given....but my suggestion is to always go for NO CREDIT , As you will need to keep running your business ...and the fund will not be available at initial stage of business ...then this no credit policy will help to puraches goods faster ..rather then investing too much money in
credit worthiness, size of the credit amount, past experience paying on time, cashflow all account for the final decision.
ive given fortune 500 companies 200 days credit on 6 figure sums and also COD terms on Low thousands depending on the above.
most importantly, you need to be confident of collecting, otherwise you're just giving yourself more time to write off the bill for work done and no money at the end.