In short

  1. 1. Treat payment timing as part of priceA longer collection cycle changes the economic value of the contract. Add milestone timing, acceptance dependencies, retention, invoicing triggers and probable dispute points to the review.
  2. 2. Look for cash asymmetryIf delivery cost happens early while collection happens late, the supplier is financing the commitment. That may be acceptable, but it should be intentional and visible.
  3. 3. Check how terms interactExtended payment terms combined with discount, heavy transition cost or high service-credit exposure can change a deal that looked acceptable in isolation.
  4. 4. Choose the leverPossible repairs include milestone billing, upfront fees, shorter acceptance windows, narrower retention or a price adjustment. The right lever depends on which cash exposure matters most.

Treat payment timing as part of price

A longer collection cycle changes the economic value of the contract. Add milestone timing, acceptance dependencies, retention, invoicing triggers and probable dispute points to the review.

Look for cash asymmetry

If delivery cost happens early while collection happens late, the supplier is financing the commitment. That may be acceptable, but it should be intentional and visible.

Check how terms interact

Extended payment terms combined with discount, heavy transition cost or high service-credit exposure can change a deal that looked acceptable in isolation.

Choose the lever

Possible repairs include milestone billing, upfront fees, shorter acceptance windows, narrower retention or a price adjustment. The right lever depends on which cash exposure matters most.

Payment terms are not an administrative detail. They are part of the economics you are promising.