Credit is the lubricant for the wheels of business

On the other hand, if you are selling to a business, they will expect you to provide trade credit. Net 30 is standard in many businesses, with a discount offered for earlier payment. An example credit term is 2/10 Net 30. This is shorthand for 2% cash discount if paid within 10 days, otherwise due in 30 days. You will be able to negotiate those terms, but it is unlikely that you can get your business customers to pay cash on delivery. Unless, of course, you are selling something that is hard to get or in short supply or you are providing an exclusive service.

In order to offset this cash flow problem, at least partially, it makes smart business sense to negotiate favorable credit terms with all your vendors. Many suppliers may require you to pay for initial orders by cash, check or credit card until your business has been deemed credit worthy. Once you have established that you can pay your bills on time, it is possible to negotiate trade...