How To Negotiate With Clients That Insist On 60+ Day Payment Terms

Whatever It Takes
Sometimes this is what it takes to get paid on time.

Cash flow is arguably one of the most important elements of running a business. For any business it can be really difficult to deal with clients that pressure 60+ day payment terms. Or “Net 60”, which means they receive your invoice and wait at least 60 days to send payment to you.

Running out of cash usually means going out of business.

I watched The Founder this past weekend. Early on, Ray Kroc was struggling with cash. He was growing McDonald’s franchises all across the country at an incredible rate, but he was strapped for cash and late on his bills.

Even the extreme growth and seemingly strong business wasn’t enough to overcome cash issues.

The same thing happened with Nike. Its founder, Phil Knight, discussed the issues at length in his book, Shoe Dog. The early days of the company were mostly about getting enough cash to get to the next month. Even as the company grew and grew it was always about having cash.

One issue, with any business, but especially with small businesses, is getting paid by customers and clients.

The faster you get paid the better your cash flow.

If you’re struggling with clients insisting on 60+ day payment terms there are a few things you can do…

Require Upfront Payment

More businesses have been doing this and it seems to work just fine.

It’s simple.

Before you get the Big Mac from McDonald’s they require money. You give it to them and they give you the Big Mac.

In some industries that’s seen as backwards.

But the important element seems to be the promise of a refund. Chances are good that if you get a bad Big Mac from McDonald’s that their employees have the power to provide you with a refund. I would think the manager at least has that ability.

So you can have a clear and upfront refund policy. This can also force you to be as efficiency and effective as possible so as to limit your refunds.

That includes screening the clients you bring on. You want to obviously avoid the ones that aren’t fully committed to start.

Offer Early Payment Discounts

This is another common practice. You’ll see this with a lot of web apps. They don’t require payment upfront, but if you pay for the full year right now you get a 10-15% discount.

It’s not a huge discount, but it’s enough to get your attention. It’s especially effective if you don’t offer other discounts. If your clients know that you don’t offer discounts they will take advantage when you do and this can be one way.

The flip side of this would be charging more for customers that are late with payments. That can obviously strain the relationship, but the customers themselves are putting strain on things by not paying as soon as possible.

You could implement this by talking with customers right away about your terms. You can offer a 10% discount if the invoice is paid within 10 days. Work upfront with them so they don’t miss out on the discount.

Implement A Reminder System

Part of a negotiation might be implementing a reminder system.

It’ll be difficult to completely get all clients to pay you fast. There shouldn’t be a reason for a client to take a long time to pay, but there are several it seems.

They’re busy.

They didn’t see the invoice.

All kinds of things.

One of the best things you can do is to implement a reminder system.

A key ingredient to this is to approach it with the idea that the client isn’t delaying payment on purpose. You want the reminder to be friendly. Offer up solutions so that they don’t see the reminder.

Identify the person your team that will be in charge of the reminders. Perhaps someone in your accounts. Maybe the account manager.

Let’s say you want to be paid within 10 days of sending an invoice. In the first invoice you could include a note about how to signup for auto-billing.

7 days later, 3 days prior to your 10 day due date, you can send a very soft reminder. Something like “just making sure you received this invoice”. Very soft. Not accusatory in any way.

At 14 days you could send a second reminder. Softly mention that it’s late. Assume they have just not seen the invoice or have misplaced or forgotten about it.

Ask if there’s a better person possibly on their accounts team that should also receive the invoice. Ask if they have preferred payment terms and if they do make note of that so you can exclude them from your reminders or offer them the discount for early payment option.

Also part of this process will be canceling service. That’s a fine balancing act. You’ll have to decide, but it seems most business cancel service somewhere between 30 and 90 days of no payments.

Talk To The Accounting Department

This is one of the best ways to ensure payment.

When I worked in the corporate world I worked with a few vendors. I was their contact. But I wasn’t in charge of sending out payment. That was on the accounting department at the company where I worked.

Usually invoices would come to me. I would sign off on them and forward on to the accounting team. That process can get dragged out. There are many little opportunities for delays.

I could set the invoice aside and forget. The accounting person might do the same. Lots of little things that could delay it.

A better way is to include the accounts person in all communication. This way they have the information they need right away. And if you’re including two people chances are that both won’t miss it or forget about it or anything like that.

Better Terms, Better Treatment

You don’t really want to think about it this way, but we all have preferred clients.

We prefer clients over others for a variety of reasons.

How they treat us in communication. How they appreciate the service or product we provide.

And also how quickly they pay.

I don’t really know how you can tell your clients that this is the case. Maybe there are ways to drop a few hints.

If a new client starts talking about how they don’t pay invoices until 60 days you could drop the hint that your favorite clients pay their invoices right away.

It’s tricky. But if you’re charging basically the same price for all your clients it’s normal to prefer the ones that pay the fastest.

Insist On Consistent Terms

Sometimes 60+ days is totally fine.

But as you’ve probably seen, it’s not the 60 day terms that is frustrating. It’s when 60 days turns into 70, 80 and even 100+ days.

You can let clients know that you’re fine with 60 or whatever days, but that you appreciate the same terms every month or every quarter. Then once you’re in the flow you’re getting consistent payments.

The cash flow issue often revolves around consistency more than the actual number of days.

Service Large Clients, But Look For New Clients

If all negotiating fails with clients you’ll have to focus on what you control.

This would be easier with smaller clients, but it’s more common with larger firms. They have the leverage if they’re providing you with a lot of money. And they know it.

However, you control your future. You can work with the large client on their terms. You can provide great service.

But if you’re frustrated with the consistency of their payments you need to look for alternative clients. You’re probably doing that anyway to grow your company, but one way to grow your company and to make it more efficient is to work with the most ideal clients possible.

You might need five smaller clients to replace a large client, but if you’re more efficient with those five then a top priority should be to get them so you can fire the large client.

It will cut into your revenue and profit in the short-term, but if you’re continuously looking for ways to make your business more efficient you have to look at how any clients are causing inefficiency including with their payments and your cash flow.


Getting paid on time is not a fun part of business. I’m a big believer in The Golden Rule of Business Payments. I try to treat others how I would want to be treated. I do think about getting preferential treatment by paying as soon as possible.

But not all companies think that way. Some like getting paid as soon as possible while paying as late as possible. That’s a questionable way to operate, but many do it.

Hopefully the tips above can help you find the right partners. The ones that are mutually beneficial and in it so that everyone can succeed.

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