Invoicing the government with terms

"Rod" wrote

Based on my various client experiences, it varies from agency to agency as to if they take the discount or not. Most are pretty prompt though, within

60 days. Ask the particular county you plan to do business with (offer the discount to) and see if they have that policy in place.

This information may be contained in the purchase order, but I have to wonder why you would offer a discount for paying on time. Typically, discounts are given for early payment and on time is just expected.

I don't know how local government works with regard to payment, but the military (also government, but certainly not local) is required to pay interest, whether charged for it or not, when payment goes beyond terms. The one caveat is that they do not begin aging it until all paperwork is matched up (receiving reports, invoices, etc...) so I can show a delinquency of 2 months when they only show a delinquency of 2 weeks.

I would think each county has procedures and rules in place for taking offered discounts much like any company would. The taxpayers would not be too keen on the county wasting money by NOT taking discounts, but that does not necessarily mean there is a law that requires it. I'm not so sure any law would be upheld anyway because sometimes a discount period is too short to determine whether or not the goods have actually been received. It is much easier to delay payment than to seek a refund.

Thanks very much for the feedback!

We would like them to pay on time, but for some reason even though the people who use our product are satisfied with the delivery and don't request any changes, the accounting departments seem to always drag their heels. Which would make sense to me if we were dealing with corporations who wanted to improve cashflow, but doesn't make sense when dealing with a government agency with an allocated budget.

Therefore, this is sort of a shot-in-the-dark we heard about... the idea that offering trivial discounts would force their hand.

Any more thoughts are appreciated!