Supplier Payment Terms Checklist for Small Businesses (The 30 Days You Don't Have to Ask Twice For)

A business negotiates hard for the money owed to it and then takes whatever terms the supplier printed on the first invoice. Terms are a price of the relationship, not a favour — and defaulting to cash-on-delivery when the industry runs net-30 is an interest-free loan handed backward. This is the checklist for the quiet half of cash flow.

The quiet leak. $40,000 of monthly supplier spend on 7-day terms instead of net-30 is a permanent, interest-free $30,000 working-capital loan to your suppliers. Nobody sees it as a line item; they see it as the reason the tax bill went on the credit card. The business that asks for net-30 at onboarding pays the same invoice 23 days later than the one that didn't ask. The ask costs one sentence.

The terms ladder — four asks, in order:

1. The net-30 ask, at onboarding. Never at invoice time — before the first order there's nothing to argue about. One sentence: "We pay all suppliers on a consolidated weekly run against net-30 terms — can you confirm that works for your side?" Most say yes, because net-30 is the default; the businesses on COD are the ones who never said it.
2. The extension for slow stock. Inventory that turns in nine weeks financed itself alone. Ask for net-45/60 tied to the turn: "these lines turn in about nine weeks; net-45 keeps us ordering monthly instead of quarterly."
3. Capture the early-pay discount — automatically. 2/10 net 30 (2% off for paying in 10 days) is roughly a 36% annualized return, the best yield a cash-rich small business will ever see. The rule: the discount is the only reason to pay early. No discount, no early payment.
4. The weekly payment run. One Friday run, due-date order, one schedule. Ad-hoc payments are how duplicates, missed discounts, and "the loudest supplier gets paid first" happen.

The rules: terms are negotiated once, at onboarding; the PO carries the terms (memory is not a document); pay on the due date, not before — the float is the cheapest working capital you own; never pay late silently (one call, reason + new date, before they ask); one run, one place, one person — a payment run split across four bank logins is how BEC fraud finds its opening.

The four traps: paying COD from habit after terms exist; the early-payment reflex without a discount; asking for credit while paying cash (the supplier's credit team reads the contradiction); the never-reviewed term — five minutes per supplier, quarterly, spend next to terms.

The worked example. A two-crew landscaping business: ~$6,000/month from a nursery on 7-day terms set in 2016, ~$2,000/month at a hire yard paid cash-on-delivery by pure habit, ~11 separate supplier payments a month. One morning: net-30 requested from both — the nursery offered 2/10, taken every month (~$1,440/year from cash already earmarked for the invoice); the hire yard moved to a monthly account. One Friday run replaced eleven interruptions. Across the quarter: ~$18,000 of float freed — the quarter's equipment upgrade came out of the operating account instead of the credit card — plus the discounts and two hours of admin gone. No supplier lost; the hire yard offered a better seasonal rate once account history existed. The owner: "Eleven years of paying like a new customer. One conversation with each of them; neither one even hesitated."

Full checklist (rules, traps, the payment-run setup): Supplier Payment Terms Checklist — HIVE80lab ops-notes