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If there is anything that the pandemic, the Great Resignation and the resurgence of inflation have taught us, it’s that what we think is a sure thing just might not be. That includes the cash flow of a business. Many companies have budget gaps. Newer businesses can have it even worse. Companies which don’t yet have many clients may offer more advantageous terms to try to bring in more business. Sweetening the pot can help overcome a client’s initial skepticism. Just like a starter vendor, a startup may be offering Net 30 terms.
Offering Net 30 or Net 60 or even Net 90 terms is a great strategy to develop business relationships. But a company ends up with a lot of time between providing a good or service and getting paid for it. But in the meantime, a business’s bills have to be paid, including payroll, which must be met no matter what.