Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

Ask HN: How do your enterprise customers pay you?

news.ycombinator.com

Post reply on HN
Print view View original

31–40 of 123 posts

Re: Ask HN: How do your enterprise customers pay you?

#31

Post by cpncrunch »

patio11 wrote: post #12

Overwhelmingly: Send a quote for the upcoming year, get a PO number corresponding to the quote, send an invoice referencing the PO number, wait an interminable amount of time, a check magically appears in the mail. The last one was 9 months late in paying. Enterprise life, yay. Salient point to keep in mind: the people responsible for everything that happened in that workflow after my customer passed the quote to her…

They can speed things up if they want to. I hope you're not providing your service for free for 9 months. At some point you need to give them a deadline. It's easy with SaaS, as you can just flick off the switch if they don't pay. Obviously with a large, important customer you don't want to immediately deactivate their account if they are overdue by a day, but you have to have a limit!

Re: Ask HN: How do your enterprise customers pay you?

#33

Post by refurb »

toomuchtodo wrote: post #24
patio11 wrote: post #22

Earlier quoted context omitted.

The customer believes that it paid NET 30 ("You received the check within 30 days of us deciding to send you a check. NET 30!") and that I can speak to Legal if I want to press the issue, which (naturally) I don't. As near as I can tell, this is just priced into everyone's expectations.

Do you ever consider charging more as a premium for the delay?

I was wondering about this! Has anyone tried it?

I know in my industry (pharma) we offer "prompt pay" discounts to our customers. 2% 30 net 60 for example (payment due in 60 days, get 2% off is paid in 30).

Of course a huge corporate has a lot more leverage with regards to terms than a small contractor.

Re: Ask HN: How do your enterprise customers pay you?

#36

Post by amirmc »

patio11 wrote: post #12

Overwhelmingly: Send a quote for the upcoming year, get a PO number corresponding to the quote, send an invoice referencing the PO number, wait an interminable amount of time, a check magically appears in the mail. The last one was 9 months late in paying. Enterprise life, yay. Salient point to keep in mind: the people responsible for everything that happened in that workflow after my customer passed the quote to her…

The missing step here is the 'internal champion'. It's usually possible to speed things up if someone within the company is able to push things. I've done this for certain suppliers when we've negotiated favourable terms so I spent an additional 2hrs figuring out exactly who I had to nag to get it expedited.

Of course, it's easier not to care but you can make it a negotiating item (if that's part of your sales process).

Re: Ask HN: How do your enterprise customers pay you?

#37

Post by tomjen3 »

gk1 wrote: post #8
kephra wrote: post #3

Let define "enterprise customer" first. This is someone for whom the terms, conditions and prices of your website do not apply. Enterprise customer = Ask for quotes. So you might delay the question of how they pay you, once you have an enterprise customer ready to sign. An other distinction is, that you might charge accounts of normal customers, but you always just send an invoice to an enterprise customer, and they…

> My trick of getting the money fast is to offer 2% discount, if they pay within 7 days. Great tactic. The reason this works, in some cases, is NOT because the company cares about a measly 2% of whatever they're paying, but because they may have a policy that says they _must_ accept discounts if available.

Then 1% for 4 days should work equally well, right?

Re: Ask HN: How do your enterprise customers pay you?

#38

Post by eitally »

patio11 wrote: post #12

Overwhelmingly: Send a quote for the upcoming year, get a PO number corresponding to the quote, send an invoice referencing the PO number, wait an interminable amount of time, a check magically appears in the mail. The last one was 9 months late in paying. Enterprise life, yay. Salient point to keep in mind: the people responsible for everything that happened in that workflow after my customer passed the quote to her…

Here repping enterprises, can confirm this is how things work. But we don't pay late out of malice. Often incompetence and apathy, sure, but we don't actively set out to cheat you guys.

We start our Net-X countdown clock at the very last moment, and typically that is when we start receiving the service (not when we agree to a deal). This seriously irks most vendors, but they seem to have been beaten down and conditioned over such a period as to just deal with it. Ultimately, the goal of an enterprise (or any business) is to have revenue that exceeds expenses, and a super simple way to maximize this on a periodic scale is to ensure your AR period is shorter than your AP period. Iirc, we're currently standardized on Net-45 for receivables, down to Net-30 whenever possible, and start negotiations with Net-90 for AP, usually getting down to Net-60. That extra 15-30 days makes a huge difference sometimes in positive cash flow. I don't endorse the behavior but it is what it is. Another "trick" to save money is to negotiate an annual contract into quarterly (or other periodic) payments. For one $1.5m/yr contract, for example, that saved us something like $200k/yr.

We pay by ACH whenever possible (it is cheaper and easier for us, by far, than writing checks), and part of our vendor qualification process includes getting bank details. We do write thousands and thousands of checks, though. :)

Re: Ask HN: How do your enterprise customers pay you?

#39

Post by gjoeworm »

refurb wrote: post #33
toomuchtodo wrote: post #24

Earlier quoted context omitted.

Do you ever consider charging more as a premium for the delay?

I was wondering about this! Has anyone tried it? I know in my industry (pharma) we offer "prompt pay" discounts to our customers. 2% 30 net 60 for example (payment due in 60 days, get 2% off is paid in 30). Of course a huge corporate has a lot more leverage with regards to terms than a small contractor.

In my experience, this results in MegaCo taking the 2% discount, and still not paying within six months.
Post reply on HN