Why do supplier terms matter so much?
Every day of credit a supplier gives you is a day of funding you don’t need from anywhere else. If your business buys $60,000 of stock a month and moves from 14-day terms to 30 days end of month, you’ve freed up weeks of cash without borrowing a dollar.
For wholesalers, retailers, builders and anyone who carries stock, supplier terms are often the cheapest working capital available. Our working capital cycle guide shows how they fit alongside debtor days and stock days.
What does “normal” look like in Australia?
- 30 days end of month (30 days EOM). The most common trade term. March invoices are due 30 April.
- 60 days EOM. Used by some larger buyers and in some industries.
- 7 or 14 days. Common for new accounts and smaller suppliers.
- Cash on delivery or payment before dispatch. Typical for new customers or a patchy payment record.
- Deposit plus balance before shipping. Standard for many imported goods.
The other side of the ledger matters too. The Payment Times Reporting Scheme found that the time large businesses took to pay 95% of their small business invoices rose from 58 to 64 days in the first half of 2025, even as average times held steady. If your big customers pay on 60-plus days while suppliers want 30, that gap is the working capital you have to find.
Before you ask: get your house in order
Suppliers extend credit to customers they trust. Before negotiating:
- Pay on time for three to six months. Nothing strengthens your case more.
- Know your numbers. What have you bought from them in the past year? What’s the forecast?
- Understand their position. A small local maker has less room than a national distributor.
- Decide what you want. Longer terms, seasonal terms, staged payments, a discount, or a higher limit?
Five things to ask for
1. Longer standard terms
“We’ve paid every invoice on time for the past year and our orders are up by a third. Could we move from 14 days to 30 days end of month?”
2. Seasonal (dated) terms
Ask for terms that follow your cash cycle. A garden centre could ask a nursery wholesaler to invoice spring stock in August but make it due in October, once spring sales are flowing. A ski-hire shop could ask for May deliveries due in July. Some suppliers call these “dating” terms.
3. Staged payments
On a large order, ask to pay in instalments — a third on order, a third on delivery and a third 30 days later.
4. An early-payment discount
If you have cash or a facility available, ask what discount they’d give for payment within seven days, or on order.
5. A higher credit limit
As your orders grow, ask for a limit that lets you place larger orders without waiting for earlier invoices to clear.
What can you offer in return?
Negotiation works best when both sides gain:
- Volume — a larger order or a committed annual spend.
- Forecasts — sharing your order forecast helps the supplier plan production.
- Preferred-supplier status in a category.
- Faster payment on some lines in exchange for longer terms on others.
- Reliability — the simple promise that every invoice will be paid on the agreed date.
The early-payment discount sum
It comes down to one comparison: is the discount worth more than it costs to fund paying early?
Example scenario — illustrative only. A Brisbane building-supplies wholesaler is offered a 2% discount for paying a $40,000 invoice on order instead of on 30 days EOM, roughly 45 days later. The discount is worth $800. If funding $40,000 for 45 days costs meaningfully less than $800 — a lending specialist can tell you the actual cost for your situation — taking the discount leaves the business ahead.
Do the sum every time. A discount that works on one invoice may not on the next.
What if the answer is no?
Sometimes a supplier can’t move, especially overseas manufacturers with thin margins. Then:
- Ask again after a few more reliable orders.
- Split large orders to reduce the upfront amount.
- Consider whether a facility can bridge the gap: a line of credit can pay suppliers upfront and be repaid as stock sells.
Negotiating with overseas suppliers
Importers face a particular challenge: many manufacturers ask new customers for full payment before goods ship. Terms can improve with time:
- Start with a deposit structure — moving from full payment upfront to a deposit on order and the balance before shipping.
- Move the balance later — after several reliable orders, ask to pay on arrival at Port Botany, Melbourne, Brisbane or Fremantle, or a set number of days after the bill of lading.
- Ask your bank about trade finance for larger orders.
- Watch the exchange rate. Payment timing changes what each order costs you. Your bank can explain currency options.
Regular video calls or a visit to the factory can make a real difference to how much flexibility a supplier offers.
Put agreements in writing
Once terms are agreed, confirm them by email and make sure they appear on invoices and in your accounting software. Terms that live only in someone’s memory tend to vanish when staff change. If a supplier’s standard-form contract contains one-sided payment clauses, the Australian Small Business and Family Enterprise Ombudsman has free resources for small businesses.
How funding complements good terms
Good terms shorten the gap; funding covers what’s left. A wholesaler with 30-day EOM terms from suppliers but 60-day terms from its biggest customer still has a gap to fill. Our wholesale and distribution page explains how we help importers and distributors, and if a bulk-buy discount is too good to miss, see opportunity funding.
You can start a 60-second enquiry at any time. For the everyday gap between paying suppliers and being paid by customers, a business line of credit suits businesses usually trading six months or more.