[adrianhoward]

So if you’re dealing with, say hypothetically (not a client), Bank of America, you will not budge the Bank of America purchasing department, because they just don’t care

ProTip: Make friends in the purchasing department and learn their rules. There are often ways to game the system...

For example: Some may have a global rule that they must take advantage of any discount greater than N% on the invoice if it's just a case of moving the payment date. Offer an N+1% discount for payment up front to that department and you will automatically have payment up front. Suddenly your cashflow looks much happier ;-)

(edit: Also - you never punish people for late payment. You reward people for early payment. Of course the numbers may look the same either way ;-)

[pc86]

Why would you not punish people for late payment?

[adrianhoward]

Because it's more effective not to (in my experience anyway). Instead use the same numbers and make it look like a great deal. So rather than.

"Your bill is $10k, pay after Dec 15 and you get fined an additional $5k"

say

"Pay by Dec 15 and get our discount rate of $10k, otherwise get our standard rate of $15k"

Numbers are the same. Very different reaction from people.

Discounts are something people want. Having time-limited discounts is a classic sales technique. People don't want to lose out.

Some departments are required to take discounts, but encouraged to fight late fees.

Fines are annoying, but the effectively give you a structure and excuse for doing the bad thing.

There is no logical difference - but people aren't logical.