Margie Dana

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Recently a print buyer wrote about an issue I've not covered yet: discount payment terms. "We are trying to find out whether discounted payment terms are a regular part of printers' business. We know that they are still a big part of the paper side of the business, where the merchants typically pass along (or in some cases enhance) the payment term discounts extended to them by the mills.

"I am also aware that printers are usually grateful to receive payment on time within net 30 terms, but have you heard of any that routinely offer payment discounts for earlier payment?"

I didn't know of any trends, so I polled about a dozen commercial printers. OK, so it's not exactly scientific - but my poll pulled in some consistent responses:

1. Discount terms used to be common in printing - but not today.

2. They're not offered mostly because customers take advantage of them.

3. If you're a customer giving a printer a large volume of work, it can't hurt to ask about discounts.

At one time, the industry tended to offer discounts for quick payments, but now they seem to be an exception. Discount terms - such as 2% if you pay your bills in 10 days - disappeared, because customers didn't pay on time yet still took the discount.

It's not always the customer's fault when terms are abused. In large companies, purchasing or other departments handle invoicing. Invoices travel through some companies at the speed of molasses. "...most companies have such complicated PO processes," said one printer, "it can take up to a week after we ship a job to reconcile the PO with an invoice (change orders, freight, mailing costs, etc.), so we are typically already 7-10 days out by the time the invoice goes out."

"We do not advertise that we offer discounts," wrote one printer. "That stated, if the customer is a valuable customer and is providing enough volume, then we will provide a discount. They need to pay in 10 days to get this discount. It is normal for 2% discount to be paid in 10 days…" There are other reasons why printers aren't so keen to offer discounts. For a typical, small-quantity print job, it's just not worth the effort and the extra processing involved.

Another reason why discounts aren't offered, noted one printer, is because "if we are doing business with reputable companies, offering a discount for something they are going to do regardless of the payment dates involved seems pointless."

Some printers don't offer discounts because the cost of cash is low right now. "When interest rates are low, discounts on quick pay are not as attractive."

A few of the commercial printers I polled said that discounted terms are still very much a part of their business - and a welcome one. "Honestly," wrote one printer, "our discounting customers play an integral role in our cash flow. We welcome fast-paying customers and offer the 2% discount with open arms."

"In this very competitive environment," wrote one printer, "I think it may be better to just give someone your best price that has all discounts included and expect payment in 30 days. I'd venture a guess that most printers don't get 30-day payment from the majority of their customers. Final word, if buyers want or insist on discounts, are they willing to pay finance charges on overdue payments? Fair is fair."

Indeed.

I've often heard that most printers work hard at getting paid in 30 days - let alone 10. If you are a customer who's offered a discount, just remember that the terms need to be honored. A printer is not a bank, after all. You'll make a lasting impression on a printer if you pay your invoices on time.*

©2007 Margie Dana. All rights reserved. You're free to forward this email to friends and colleagues: please do! However, no part of this column may be reprinted without permission from the author.

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*Printers, please weigh in on this subject! Take our March BPB Poll that asks, "When do the majority of your customers pay their invoices?" The poll's on our home page at www.bostonprintbuyers.com.

MARCH BPB DINNER PROGRAM: Meet the Press!

When:	Wednesday, March 21, 6 - 8:30 pm
Where:	Millennium Bostonian Hotel, Boston, MA
What:	Panel of printers discussing key issues for buyer audience
Cost:	$20 for BPB members; $50 for nonmembers*

Co-sponsors:

Deschamps Printing
George H. Dean Company
Hanson Printing

The Scoop

We invite print purchasing professionals to register for this event. Come listen to and learn from three successful printers discuss current issues, including: how has industry consolidation affected you? What will your equipment list look like in 5 years? Can you describe the "perfect customer?"

When you register, ask your own question. As moderator, I will have my own list as well (I was a Girl Scout, so I'll be prepared.)

Dinner will be served (think Italian!), the discussion will last 75 minutes, and we'll have our usual, fun Trivia Contest with prizes.

Register today! Our events fill up, and seating is limited.

*On-site registrants will pay $10 more.

NEW BPB POLL!

Printers, this one's for you:
Do the majority of your customers pay their invoices in...

• 30 days or less

• 30 - 60 days

• 60 - 90 days

• 90 days or more

Cast your vote today. Go to our home page at www.bostonprintbuyers.com.

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