How to Negotiate Better Payment Terms with Your Buyers
For many SMEs in Asia, cash upfront or letters of credit have been the default way of doing business. These terms feel safe. You get paid early, and you keep risk low. But in today’s global market, buyers increasingly expect open account and deferred payment terms. Meeting them halfway is often the difference between being a one-time supplier and becoming a long-term partner.
So how do you negotiate payment terms that keep your buyers happy without putting your business at risk? Here are practical, honest steps you can take.
1. Understand the Buyer’s Perspective
Buyers want open account terms because it helps their cash flow. Paying after 30, 60, or 90 days means they can sell goods before parting with cash. For them, deferred payment is not just convenience — it is survival.
Showing that you understand their challenges builds trust. Start by acknowledging the pressure buyers face. This small step can shift the tone of negotiation from adversarial to collaborative.
2. Highlight the Win-Win
Frame payment terms as a partnership. When you offer flexibility, buyers are more likely to:
-
Increase their order size
-
Prioritise you over competitors
-
Come back with repeat business
You can be clear that offering deferred terms helps both sides. They gain breathing room in cash flow, and you gain larger, more stable orders.
3. Be Honest About Your Limits
It is tempting to over-promise, but honesty works better. If 90-day terms will break your cash flow, say so. Propose shorter terms like 30 or 45 days as a stepping stone. Buyers respect transparency. By being upfront about your needs, you set the foundation for trust instead of creating unrealistic expectations.
4. Use Financing as Your Safety Net
This is where receivables financing comes in. Let your buyer know you are open to deferred terms, but explain that you partner with finance providers to keep your own operations safe. This reassures them that you can confidently support larger orders without risking your company’s stability.
When buyers see you have a professional system in place, it increases their confidence in doing business with you.
5. Put It in Writing
Once terms are agreed, document everything clearly. Define the credit period, the due date, and what happens in case of delays. Clarity prevents misunderstandings and protects the relationship.
6. Build Gradually
If you are working with a new buyer, start small. Offer deferred terms on a limited volume or a shorter period. As trust grows, expand the scope. This way you reduce risk while still showing flexibility.
Final Thoughts: Negotiation Is About Balance
Negotiating payment terms is not about giving in. It is about finding the balance between your buyer’s need for flexibility and your own need for security. The most compelling message you can send to a buyer is:
“We want to support your growth, but we need to keep our business healthy too.”
With honesty, flexibility, and the right financial tools, you can move confidently toward open account terms. And when you do, you will often find that buyers reward you with more business, more loyalty, and more opportunities.
Take the First Step
At Convergence Capital Group, we work with SMEs to make these negotiations easier. Our receivables financing solutions give you the confidence to offer open account terms while keeping your cash flow intact.
Ready to turn payment negotiations into growth opportunities?
Let’s talk about how you can move forward safely and competitively.
Previous Post
