Can I have an invoice discount?

January 28, 2019

There is one question that sales reps dread but ultimately expect to hear during a negotiation.

“Can I have a discount?”

In this position (especially if rent is due), the sales rep might be thinking, “Sure, that’s fine.” They’d rather lose a percentage than have the deal drag on for another week, another month, or not happen at all. As they say: Time kills deals.

The sales rep says something like, “I’ll see what we can do” or “I’ll check with my manager.”

Agreeing to a discount during a negotiation is risky because — to the buyer — it establishes the precedent that you are willing to lower the price. A tough negotiator may get the Yes for 10% and then decide hey, why not ask for 20% and see what happens. See how far the seller will cave.

Or what’s stopping the buyer from still paying their invoice late? The customer who takes 67 days to pay won’t automatically speed things up because of a discount in the contract. This becomes the worst of both worlds, the price went down and the payment is still late.

I know there are tons of articles/books/podcasts that train a sales rep on what to say when asked for a discount. But what I’ve been thinking about lately is this: Could speed of payment tied to an adjustment in price be a good thing for both the buyer and the seller? Could it lead to both sides being happy?

Here’s what I mean. The customer in a negotiation wants to secure the best possible value. They want to show their boss, “Hey, I got all of this AND it was less than the original price.”

On the other side, the seller wants to not only make the sale, but to receive the payment as fast as possible so they can quickly collect their commission. There’s a big difference between a $100,000 deal that pays 120 days later vs. the one that pays right away. And the business, just like the sales rep, has bills to pay. Payroll is due Friday and employee’s families depend on being paid on time.

At FinanceFuel, we came up with a way for both sides to reach these goals above while eliminating the risk of larger discounts during a negotiation or payments coming in late.

But we’re using our first ever “To Be Continued” cliffhanger ending here on the blog. Come back Wednesday and see why offering a rebate with FinanceFuel (not a discount) achieves the best aspects of offering a discount without all of the negative side effects.

FinanceFuel accelerates a business’ cash flow by speeding up Accounts Receivables. We remove the remedial processing and collection tasks so employees can focus on high-value work driving the business forward. You can learn more about FinanceFuel on our website or, if you’re interested in speaking directly with a member of our customer success team, send us a note (sales@financefuel.co) and we’ll get back to you right away. 

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