Requesting Discount on Early Payment [DATE, ex. Generally, you want as much time as you can get to pay your suppliers. I am a qualified landscape artist and believe I can get another job soon. In future, to pay your account earlier, we request you to offer us an early payment discount, like offered by other suppliers. The body of the letter should clearly state the nature of the financial hardship. The letter, dated 1 July, gave suppliers just two weeks notice of the changes to payment terms. Now that you are an account holder, we will give you advance notice of any special sales or other features of interest. Aim high — you will never get more than you ask for. I understand that the interest still accrues and intend to pay this debt in full. As with Procter & Gamble and others, it appears Mondelez will offer some type of assistance to help suppliers weather the cash flow storm, citing in the letter new on-line tools for "supply chain financing" that will be coming soon. The lending institution may have an online request form or a form that can be downloaded from the website. All hardships should be included in the letter. I have made payments of $200 per month for the past 18 months, and the loan is for 12 more months. Eight tips for improving your payment terms with suppliers. Here are some tips for writing a good extension request letter that delivers the necessary information for the best results possible: The letter should end with a summarization of the purpose of the letter. Flexibility is key to maximizing the value of your trade credit. Here is an example of a common payment terms scenario starting from the initial phase of ordering samples, to placing a trial order, to a repeat order, to building guanxi with the supplier to get more favorable payment terms. Indeed, our construction sites have never … Review supplier payment terms regularly to help you manage cash flow. Perhaps you’re struggling during COVID-19 and are looking to improve your cash flow in a pinch. I would like to make my last payment on DATE and resume payments on DATE. When discussing payment terms with suppliers, consider asking them to: 1. extend the payment days from 30 days to 45 – to smooth out changes in your cash flow* 2. allow you to pay quarterly – for example, companies such as water and power utilities 3. start the payment term from complete delivery and not part delivery. Your email address will not be published. New research by The Hackett Group has indicated that 32% of respondents are planning to extend their supplier payment terms. The borrower should make a specific request. John Smith XYZ Inc. 1234 First Street Suite 567 Anycity, Anystate 85245] Dear [NAME, ex. There is often more reticence from internal parties about supplier pushback than actual pushback. suppliers (e.g. Payment terms with suppliers will vary from industry to industry. In response to the financial recession of 2008, many supply chain and procurement departments began pushing their suppliers for extended payment terms as a means to improve cash flow and limit the need to acquire credit, which was in short supply. John Smith], [THANK AND COMPLIMENT SUPPLIER FOR PRODUCT/SERVICE, ex. We plan to do a long term business with you and, hope that you will consider our request. Below is a sample letter for extension of payment terms. All required forms should be completed and sent with the extension request letter. Terms can often be extended without giving up anything if the data show that the current term is too short, but be prepared to respond to potential counteroffers and alternatives like enrolling the supplier in your p-card payment program. I am not making the full payment as – [State here the reason for not making full payment]. Letter - REQUEST EXTENSION OF TIME TO MAKE PAYMENT. landlord, marketing company, software supplier) to extend payment due dates in light of the pandemic. Employees should be trained to understand the working capital trade-off between days and discounts. Know what you are willing to offer. I have applied to three local five-star hotels as well as to a landscape architect. Each lender has different standards. For example, small companies in Europe are protected by payment terms regulations. I will call to arrange an appointment next week. Some of the most common reasons that are considered valid reasons for financial difficulties are: Loss of income because of loss or job or a reduction in income, A death in the family or the death of a co-borrower. Here’s What To Do | Debt Free Friday, DEBT COLLECTIONS MISTAKES THAT CAN HELP YOU WIN, Writing a Letter for Change of Address [with Sample], Writing a Loan Request Letter to Employer [with Sample], Writing a Letter Requesting Financial Assistance for Education [with Sample], Writing a Shift Change Request Letter [with Samples], Writing a Request Letter for Training Course [with Sample], Writing a Guest Speaker Request Letter (with Sample), Illness of the borrower or a family member that resulted in unexpected medical expenses, Unexpected expenses after a natural disaster, The letter should be concise. A benchmark of the DSO based on the supplier’s industry — especially valuable for private companies, Your current best available payment terms with the supplier — should act as a floor for term targets; even harmonizing from multiple terms to the best transacted term can be a huge win, Prominent/benchmark payment terms for your supplier’s industry, if available, 5. Once you understand your spend, take a data-driven approach to set target payment terms for each supplier. Humility goes a long way towards convincing a lender that the borrower is a sincere person who wants to pay his or her debt.