Q & A Table of Contents
Are There Standard Form Letters For Negotiating Terms?
From: Rick, Amsterdam, NY
Question: I am in the process of negotiating payment terms with my suppliers. Are there any standard, or commonly used letters that you know of?
Response: Unless all of your suppliers have the same business practices and expectations, it is quite risky to think of 'standard' form letters to use in negotiating payment terms. One used to be able to purchase standard form letters or legal documents at office supply stores. It is entirely likely that there are several software suppliers who would be delighted to sell you their CD-ROMs of 'standard' form letters for all kinds of transactions.
I would recommend taking a lower-tech approach. First create a checklist of possible solutions or approaches for payment that meet your interests. Then you should talk with each supplier separately -- and check off those elements of the payment process on your list that they find agreeable. If they suggest different terms, and if you agree with those terms, add them to your list and check them off.
Once you have a list of elements of the payment process on paper for each supplier, then you should be able to write each of them a letter outlining the agreement you have reached -- and each letter should contain a place for them to countersign, signifying their acknowledgement of your mutual agreement.
Another alternative is to create a menu of choices -- all of which you find acceptable beforehand -- and send that list to each supplier. Ask them to check or circle which choice is right for them -- and countersign on that letter to signify agreement.
If you don't have a sense of what payment terms to offer, then find other folks in your business sector who can describe payment arrangements which are normally found in that particular market. Bankers, accountants, and lawyers can also be good sources of advice. After doing that homework, again you should communicate with each supplier to get their suggestions and/or agreement -- followed up by a written document recording the agreement you have reached.
Good luck,
Steve
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