One of my customers decided to help me out, (their terms) by changing their terms to 60 days net. Supposedly this helps us both out. My customer is HUGE in comparison to me, they offer to hook me up to a company called C2FO. These guys offer to pay us lowlifes that need the money a way to get paid "early" in exchange for a discount on the invoice. Anybody run into this BS?
See "factoring of receivables". The game has been played since before Sumer had their little water problem.
Wise providers of goods and services do it for THEMSELVES.
"2% 10 days, net 30" was the gold-standard textbook approach for Donkey's Years. ADDING interest beyond 30 days came soon after.
You don't need a nickel's worth of third-party "help" to make that part work. The math is a few built-in box-ticks and a number in any Accounting & Billing package or service-provider's option set.
If the buyer has already bent you over the parts washer tub, dry, for net 60?
That has become your "new normal" already.
Be happy they don't then run it to 90 ...or beyond.
I'd get an interest charge into place for slow pay. Then at least you have a record of something you waived as a courtesy to a good customer... if even you choose to waive it at all.
The other "gold standard", BTW, was fiscal common-sense. That once a(ny) receivable goes past 90 days, larger and larger reserves are meant to be established on YOUR books for the increasing probability it will becomes a 100% loss. Past 180 days, one might turn them out to a collection agency for fifty-cents on the dollar MAXIMUM. If you still sell to that slow-pay? Your rates have to keep climbing. If they absorb that increase? There's HARD PROOF they are financially unsound, badly managed, or both. Find replacement customers, and FAST.
Healthy customers, by contrast, GRAB those 2% discounts like free money. Because - to them - they ARE.
To YOU - that uptake means at least the cash is flowing in to keep the damned lights on. And your paperwork costs less for not having to chase the buggers and keep entering the debt on the books, then set up reserves, etc.
I did say "Healthy", so net 60 is a warning flag, already. They don't have to go broke. All they have to do is go stupid-greedy. Eventually YOU go broke and
they simply move-on to the next victim.
That, too, has been going on since Sumer had their little water problem. Some call it "feudalism".
Same thing, Corporate or Political. Them as has, takes. Them as don't, quakes.
Victim as withdraws consent no longer is.
A victim.