Calculate the Cost of a Terms Exception

A $300,000 customer asks to move from net 45 to net 75. Days Sales Outstanding (DSO) The common trap is jumping to a reminder or discount before identifying the real driver of delayed cash. Size exposure Extra exposure = $300,000 tied up for 30 additional days. The invoice value does not disappear, but the cash arrives one month later. Name timing risk Compare the 30-day delay to payroll, vendor payments, credit-line use, or covenant pressure. A delay matters most when it lands during a cash pinch. Ask for offset Offer 25% upfront, milestone billing, early-pay discount, or price adjustment. The…

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